Level 3, which will add those assets to its own, is putting up $370 million in cash, plus 115 million shares of Level 3 common stock. Based on the closing price of Level 3 stock on Friday, the deal is valued at $680.5 million.
Although both companies have similar portfolios, there’s less overlap in the customer area. Level 3, for example, will inherit SBC as a customer when the deal is completed, expected sometime in Q1 2006.
“Both companies are experienced providers of optical and IP-based services, and both serve similar customer bases,” said Level 3 CEO James Crowe, in a release.
Level 3’s newly merged network will reach 50 new markets, and 3,000 new route miles.
Level 3 will also pick up Vyvx LLC, a WilTel subsidiary that gathers and distributes broadcast-quality video for the media and entertainment sector.
The deal also provides that Level 3 will not acquire “certain assets and liabilities” of WilTel’s, including its headquarters building in Tulsa, Okla.