Pacific Crossing to Sell Assets to Firm

A Phoenix buyout firm best known for its real estate investments said Monday that it had agreed to pay $63 million for an undersea cable network built by Global Crossing Ltd. and two affiliates.

Pivotal Private Equity, whose parent firm owns the Century Plaza and St. Regis hotels in Los Angeles, said it planned to get into the telecommunications business by buying Pacific Crossing Ltd.’s two lines connecting the U.S. to Japan and the rest of Asia.

The price amounts to less than 5 cents on the dollar for the $1.35 billion spent by Global Crossing, its onetime major subsidiary, Asia Global Crossing Ltd.; and Asia Global’s partner, Murebeni Corp.’s Vectant, to build the 12,500-mile network.

The deal must be approved by a Bankruptcy Court judge in Delaware, and Pivotal needs federal approval to operate as a telecom provider, said its chief executive, Jahm Najafi. He expects the approvals within three months.

Robert D. Woog, founder of IXNet Inc., which Global Crossing acquired three years ago, would be chief executive once the deal is completed, Najafi said.

The two fiber-optic lines -- one from Grover Beach, Calif., to Shima, Japan, and the other from Harbour Pointe, Wash., to Ajigaura, Japan -- mainly handle traffic from Global Crossing and Asia Global Crossing customers, Najafi said. There is a lot of capacity available to carry voice and data at high speeds for more customers, he said.

Pivotal Private Equity is a subsidiary of Pivotal Group, which took advantage of slumping real estate prices in the early 1990s. Najafi’s company created Pivotal Telecom to buy and operate the network.

Najafi said his unit was looking at distressed telecom and energy assets as being ripe for purchase. He sees Web growth in China and other Asian countries booming and expects traffic between the U.S. and Asia to pick up in the next four to five years.