Great Hill Partners

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10.25.2001
Great Hill Partners Invests $23 Million in Focal Communications

Leading National Communications Provider Closes $430 Million Recapitalization; Fully Funds Business Plan

BOSTON, October 25, 2001. Great Hill Partners today announced a $23 million investment in Focal Communications Corporation (NASDAQ: FCOM), a leading national communications provider of local phone and data services serving the enterprise market. The investment is part of a previously announced, comprehensive $430 million recapitalization, positioning Focal to fully fund its business plan.

This investment reinforces Great Hill Partners' strength in the telecommunications sector in identifying service providers whose business models position them for sustained success despite the shakeout in the telecommunications marketplace.

"Focal has an enviable corporate customer base, a solid market focus, an experienced management team and now, the resources to become a top player in its sector," said John Hayes, managing partner of Great Hill Partners. "This new funding positions the Company to aggressively compete against the Regional Bell operating companies for large enterprises, which are increasingly interested in more economical and reliable telecommunications services."

Focal provides both local phone and data services to large corporate customers in 22 markets across the country. Its customers include nearly half of the Fortune 100.

Its nationwide communications network permits rapid expansion in key markets, with minimal incremental costs, giving the company significant advantage over competitors that are either under-funded or must invest in significant infrastructure before bringing new customers on-line.

"This investment gives us the resources we need to cement our lead in the top business markets, and strengthens our position as one of the most formidable players in the telecommunications services industry," said Ron Reising, chief financial officer of Focal.

The recapitalization allows for the retirement of approximately $280 million of high yield debt for equity; and provides for a $150 million capital infusion led by Madison Dearborn Partners. In addition to Great Hill Partners, other investors in this round include Frontenac Company and Battery Ventures.

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About Great Hill Partners:
Great Hill Partners is a private equity investment firm that specializes in communications, information technology, media, education and business services companies. The firm has more than $1 billion in capital under management from institutional investors, including global commercial and investment banks, state and corporate pension funds, university endowments and private trusts. For more information, visit www.greathillpartners.com.

About Focal:
Focal Communications Corporation ( www.focal.com ) is a leading national communications provider. Focal offers a range of solutions, including local phone and data services, to large communications-intensive customers. Nearly half of the Fortune 100 use Focal's services, in 22 top U.S. markets. Focal's common stock is traded on the Nasdaq National Market under the symbol FCOM.