Level 3 Tidies Up WilTel Acquisition12/23/2005 9:13 AM Eastern
Level 3 Communications Inc. has put the finishing touches on its deal to acquire video-broadcast outlet WilTel Communications Group LLC from Leucadia National Corp. for 115 million shares of Level 3 common stock plus $386 million in cash.
Broomfield, Colo.-based Level 3 estimated that by buying up WilTel, which has nationwide communications-network assets, it will add $1.5 billion-$1.6 billion in revenue in 2006 and double its existing communications business. In all, Level 3 will add 3,000 network route miles, plus access to 50 new markets, with the acquisition.
"The combination of Level 3 and WilTel unites two leading providers of communications-backbone services to create what we believe is the premier wholesale communications-services provider in the industry," Level 3 president and chief operating officer Kevin O'Hara said in a release.
Level 3 will also be getting into the video-distribution business through WilTel’s Vyvx LLC subsidiary, which is included in the deal. Vyvx has built up a significant business in gathering and distributing live and taped video feeds for the media and entertainment industry.
The final deal did see the cash payment boosted from the original $370 million, and that reflects WilTel’s stronger business performance since October, when the initial acquisition proposal was fielded.