TMCnet News
Level 3 Strengthens Market Position With WilTel AcquisitionBy Erik Linask
Associate Editor, INTERNET TELEPHONY
Level 3 Communications, Inc. announced today that its acquisition of WilTel Communications Group, LLC has been completed, with Level 3 paying Leucadia National Corporation 115 million shares of Level 3 common stock and $386 million in cash. The cash consideration at closing is an increase of $16 million from the initial sum, reflective of an improvement in WilTel's working capital. It is subject to additional adjustment based on a re-calculation of actual closing date working capital.
“There is a unique and compelling fit between WilTel and Level 3,” said James Q. Crowe, chief executive officer of Level 3. “Because of this and hard work by all involved, we have been able to close this transaction ahead of schedule. We have also continued our integration planning and are extremely pleased with the progress we have made leading up to today's announcement.”
Level 3 is an international communications and information services company, offering a variety of communications services via its fiber optic network. Level 3 also is a leader in the VoIP market, and offers E-911 services to both fixed location and nomadic users. Most of the world’s largest telecom carriers use Level 3 services, as do the 10 largest U.S. ISPs, and the 10 largest European telecom carriers.
As a part of this transaction, Level 3 acquired the WilTel subsidiary, Vyvx, LLC, an industry leader in gathering and distributing broadcast quality video — both live and taped — for the media and entertainment industry. The addition of Vyvx incorporates video feeds into Level 3’s product set — not to mention the added bonus of an established customer base for the video services. Level 3 says it is committed to ensuring a smooth transition for Vyvx clients — it should, for those customers represent a new market segment for Level 3, and one that is becoming increasingly important. With the addition of an established video service, Level 3 is well-positioned to make inroads in the triple play space.
“We recognize the importance of Vyvx's customers and are committed to ensuring they receive the highest quality service without disruption,” said Kevin O'Hara, president and chief operating officer of Level 3. “We believe that Vyvx's expertise in transporting video, combined with its strong brand and customer relationships, may create some additional opportunities for Level 3 as the video transport market evolves.”
Not only will the addition of Vyvx add to Level 3’s offerings and customer base, but the company’s voice business will also be grown by the purchase. Both infrastructure and potential for new customers will be increase, all of which will serve to strengthen Level 3’s place as a dominant player in the IP services space.
“The transaction will significantly increase the size of Level 3's communications business by increasing the scale of the company’s transport, IP, and voice business. In addition, broadening our network capabilities will facilitate increased network reach by adding 3000 additional route miles, access to 50 new markets and improved responsiveness on high demand routes,” added O’Hara.
For more information, please visit the company’s Web site, http://www.level3.com/.
|