Level 3 paid $89 million in cash to acquire Corporate Software. At closing, Corporate Software had net debt of approximately $31 million. The privately held company had 2001 revenues of approximately $1.1 billion. Corporate Software had 2001 EBITDA of approximately $18 million, excluding stock-based compensation expense, one-time restructuring charges and other non-recurring employee costs.
Based in Norwood, Mass., Corporate Software is an industry leader in the field of software marketing, procurement and license management. It is a key distributor of software products from Microsoft, IBM/Lotus, Novell, Sun Microsystems, Computer Associates, Symantec and 200 other software publishers. Corporate Software serves more than 5,000 business customers in 128 countries, and counts half of the Fortune 500 among its existing customer base.
"This transaction positions Level 3 to take advantage of a shift in the information technology (IT) marketplace which we have identified as fundamental to our company's success," said James Q. Crowe, chief executive officer of Level 3.
"For decades, the IT industry has been shaped by data processing and data storage price-performance improvement rates that have been nothing short of astounding and communications costs that have, until recently, improved at far slower rates. As a result, enterprises have generally located computing and storage resources at the point of use, even though many IT professionals have pointed out the benefits of making software functionality and data storage available as a commercial service accessed remotely over broadband networks," Crowe continued.
"We believe the combination of Level 3's continuously upgradeable network, and Corporate Software's expertise in software lifecycle management and marketing, as well as strong customer relationships, position us to benefit as companies change the way they buy and use software capability," said Crowe.
"Our goal is to make the purchase of software services over the Level 3 network as simple and reliable as buying voice services is today," said Crowe.
"Level 3's integration of Corporate Software will be focused on three areas: the potential distribution of software and software functionality over Level 3's broadband network; the expansion of (i)Structure's business by leveraging Corporate Software's customer base; and cost savings opportunities including utilizing Corporate Software's expertise to manage Level 3's IT expense," said Crowe.
Howard Diamond, chairman and chief executive of Corporate Software, said, "We entered into this relationship with Level 3 because it affords us the resources and technology to reach new levels of innovation and service for our customers and partners. This is an exciting time for our company and we look forward to working to exceed our customers' expectations and maintaining our industry leadership. Our mission remains unchanged - to be the global leader in improving the way companies acquire, implement and manage software."
Corporate Software, which employs approximately 800 people worldwide, will continue to be headquartered in Norwood. The company's existing management team will remain in place.
About Corporate Software
Corporate Software is a global leader in improving the way companies acquire, implement and manage software technology. Founded in 1983, Corporate Software delivers a full-service offering that helps more than 5,000 customers in 128 countries achieve maximum return on their software investments through dedicated software licensing experts, comprehensive procurement and license management tools, and product selection consultation on business-critical software, including desktop, storage, security, infrastructure and data management. Corporate Software's industry recognition includes rankings in Software Magazine's and VARBusiness' lists of the world's foremost software and services providers. Based in Norwood, MA, Corporate Software's annual worldwide revenues exceed $1 billion. For more information, visit www.corpsoft.com.
Corporate Software is a registered trademark of CorpSoft, Inc.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ: LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, content delivery and media distribution services. These services provide the building blocks to enable Level 3’s customers to meet their growing demands for advanced communications solutions. The company’s Web address is www.Level3.com.
"Level 3 Communications,” "Level 3," the red 3D brackets and the Level 3 Communications logo are registered service marks of Level 3 Communications, LLC in the United States and/or other countries. Level 3 services are provided by wholly owned subsidiaries of Level 3 Communications, Inc. Any other service, product or company names recited herein may be trademarks or service marks of their respective owners.
Forward-Looking Statement
Some of the statements that we make in this press release are forward looking in nature. These statements are based on management’s current expectations or beliefs. These forward looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside our control, which could cause actual events to differ materially from those expressed or implied by the statements. The most important factors that could prevent us from achieving our stated goals include, but are not limited to our ability to: successfully integrate acquisitions; increase the volume of traffic on our network; defend our intellectual property and proprietary rights; develop new products and services that meet customer demands and generate acceptable margins; successfully complete commercial testing of new technology and information systems to support new products and services; attract and retain qualified management and other personnel; and meet all of the terms and conditions of our debt obligations. Additional information concerning these and other important factors can be found within Level 3’s filings with the Securities and Exchange Commission. Statements in this press release should be evaluated in light of these important factors. Level 3 is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
