Broadview Networks Completes Acquisition of ATX Communications and New Debt Offering.

Combined Company Over $400 Million of Revenue in Northeast and Mid-Atlantic

RYE BROOK, N.Y. -- Broadview Networks Holdings, Inc. today announced it completed the acquisition of ATX Communications, Inc., an integrated communications and managed services provider that serves business customers in the Mid-Atlantic region, on September 29, 2006. On a combined basis, the Company has annual trailing revenues of approximately $400 million, driven by offering voice and data communications solutions to small and medium-sized business customers. The Company will now operate in 20 markets throughout the Northeast and Mid-Atlantic United States, including major metropolitan cities such as New York, Philadelphia, Boston, and the DC/Baltimore corridor.

Together, Broadview Networks and ATX offer a full suite of voice, data, hardware, and managed network and security solutions focused on serving the demands of communications intensive business customers. Powered by a network of 10 switches including next generation softswitches and MPLS equipment, the privately held entity has over 2,300 route miles of fiber, approximately 250 collocations, and more than 600,000 lines in service.

"When we announced the ATX transaction in June, the focus was on bringing together two great companies committed to delivering innovative and cost effective solutions to customers in our target markets," said Michael K. Robinson, Chief Executive Officer of Broadview Networks. "The teams at Broadview and ATX share a common passion for excellence in customer care and delivering on our promises."

"The integration of the two companies is underway, and we expect to be largely complete in early 2007," continued Robinson. "Along the way, our goal is to select best practices from the two organizations and to focus on serving our customers' complex communications needs."

"The more time we spend together, the better we feel about the combination of the two enterprises," added Robinson. "The opportunity to put together two networks, two product sets, and two talented teams will provide new and existing customers with even better options than before. We will be able to offer traditional and IP-based solutions across our footprint and do so with the same dedication to customer care that has been the foundation for Broadview and ATX customer relationships."

Broadview Networks financed the ATX transaction with a portion of the proceeds received from its recent $210 million offering of 11 3/8% Senior Secured Notes due 2012. Jefferies & Company, Inc. served as the sole book-running manager for the offering. The Senior Secured Notes were offered to qualified institutional buyers as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), to non-U.S. persons outside the United States under Regulation S of the Securities Act and to a limited number of institutional accredited investors within the meaning of Rule 501(a)(1), (2), (3) or (7) of the Securities Act. Broadview Networks has agreed to offer to exchange the Senior Secured Notes for notes registered under the Securities Act in 2007.

In addition to the purchase of ATX, proceeds from the offering were used to repay Broadview Networks' existing senior indebtedness and for transaction expenses and general corporate purposes. As part of the financing, Broadview Networks' existing sponsors invested an additional $10 million and converted over $70 million of subordinated debt, including the $10 million of new investment, to equity. In addition to the Senior Secured Notes, Broadview Networks secured a $25 million revolving credit facility, which was undrawn at closing. CIT Group/Business Credit Inc. serves as the administrative agent and collateral agent for the revolving credit facility.

Details of the acquisition transaction were not released. Deutsche Bank Securities Inc. and Willkie Farr & Gallagher LLP advised Broadview Networks.

About Broadview Networks (www.broadviewnet.com)

Broadview Networks is a network-based electronically integrated communications provider (e-ICP) serving small and medium-sized businesses in the Northeastern and Mid-Atlantic United States. The Company offers integrated communications solutions, including local, long-distance and international voice services; data services that encompass VPN and MPLS enabled offerings; hosted and premises-based VOIP systems; traditional telephone systems; and high-speed Internet services using DSL, T1 and T3 technologies. Customers receive a single, easy-to-understand bill and have a primary point of contact for real-time, personal customer care.

Broadview Networks is a control investment of MCG Capital Corporation (www.mcgcapital.com) (NASDAQ:MCGC). Broadview Network's largest investors are MCG Capital, Baker Capital (www.bakercapital.com) and New Enterprise Associates (http://www.nea.com).

About ATX Communications (www.atx.com)

Integrating traditional and "next gen" Internet and voice communications, managed security services, and other mission-critical technologies, ATX makes it easy for small and mid-size businesses to understand and implement technologies that address key business issues. Founded in 1985, ATX is actively committed to building long-term relationships, constantly evolving to meet businesses' changing needs.

About MCG Capital Corporation (www.mcgcapital.com)

MCG Capital is a publicly traded Business Development Company with approximately $1.2 billion in total assets. MCG Capital is a solutions-focused specialized finance company providing financing and advisory services to middle market, growth-oriented companies throughout the United States. Our capital is generally used by our portfolio companies to finance acquisitions, recapitalizations, management buyouts, organic growth and working capital.

About Baker Capital (www.bakercapital.com)

Founded in 1995, Baker Capital is a New York based private equity firm with $1.5 billion under management. Baker Capital invests in growth companies at all stages of development. The partners at Baker Capital have extensive private equity and operational experience allowing the firm to provide its portfolio companies with not only capital, but also global strategic thinking and relationships.

About NEA (www.nea.com)

New Enterprise Associates (NEA) is a leading venture capital firm focused on helping entrepreneurs create and build new enterprises that use technology to improve the way we live, work and play. Since its founding in 1978, the firm has followed the same basic principles: support their entrepreneurs, provide an excellent return to their limited partners and practice their profession with high standards and respect. Practicing classic venture capital for over 25 years, NEA focuses on investments at all stages of a company's development, playing an active role in assisting management to build companies of lasting value. With $6B under management, NEA's experienced management team has invested in over 500 companies, of which more than 150 have gone public and more than 200 have been acquired. NEA has offices in Reston, Virginia, Menlo Park, California and Baltimore, Maryland.

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