Level 3 Pays Total Consideration of 19,695,793 Shares of Level 3 Common Stock and $68.5 Million in Cash
BROOMFIELD, Colo., March 20 /PRNewswire-FirstCall/ — Level 3 Communications, Inc. (Nasdaq: LVLT – News) today announced that it has completed its acquisition of all of the membership interests of Progress Telecom, LLC, a regional wholesale network services company based in St. Petersburg, Florida. Progress Telecom, LLC was jointly owned by Progress Energy, Inc. (NYSE: PGN – News) and Odyssey Telecorp, Inc.
Pursuant to the purchase agreement signed on January 25, 2006, Level 3 paid total consideration of 19,695,793 unregistered shares of Level 3 Common Stock and $68.5 million in cash. The purchase price remains subject to adjustment for the working capital balance assumed by Level 3 as of the closing date.
“We are pleased to have completed this transaction, which expands Level 3’s footprint in the southeastern region of the United States, where we have seen strong demand for our services,” said Kevin O’Hara, president and chief operating officer of Level 3. “Progress Telecom’s reputation for operational excellence is consistent with the focus and reputation of Level 3. Because we will be able to offer a broader set of services in more markets, we believe that the completion of this transaction will enable us to expand our relationships with certain large, key customers, particularly certain wireless and international customers.”
Progress Telecom’s network spans 9,000 miles, includes 29 metro networks and connects to international cable landings in South Florida and 31 mobile switching centers in the southeast. Progress Telecom serves approximately 200 customers with a significant concentration of international and wireless carrier customers.
“We are looking forward to working together as part of the Level 3 team,” said Ronald J. Mudry, president and chief executive officer of Progress Telecom. “We believe our customers will benefit greatly from expanded access to Level 3’s international network and its broad suite of transport, IP and VoIP service offerings.”
“We believe there are a number of significant benefits to this transaction, including lower access costs in the region and unique cross selling opportunities that arise from the companies’ similar service offerings and customer bases, and complementary infrastructure,” said O’Hara. “In addition, while we expect to retain a significant local presence in the region, we believe we will be able to realize cost savings by integrating certain operational and corporate activities. We expect to begin most network related integration efforts, once we have realized additional scale and efficiency through the integration of WilTel, which we acquired in late 2005.”