Deal Expected To Close Fourth Quarter 2005
BROOMFIELD, Colo., October 25, 2005 – Level 3 Communications, Inc., (Nasdaq:LVLT) today announced that a wholly owned subsidiary has signed a definitive agreement to sell (i)Structure, LLC, Level 3’s wholly owned IT infrastructure management outsourcing subsidiary, to Infocrossing, Inc. (Nasdaq: IFOX), a provider of selective IT outsourcing and business process outsourcing solutions.
Under the terms of the agreement, Level 3 expects to receive total consideration of $81.5 million, including $1.5 million of Infocrossing common stock, plus reimbursement of capital expenditures made prior to the closing date for certain recently signed customer contracts, an amount that will not exceed $10 million. The purchase price is subject to a customary working capital and certain other post-closing adjustments. Infocrossing intends to utilize a combination of cash on hand and the proceeds from certain financings to pay for the acquisition. The sale is subject to regulatory approval as well as certain other customary closing conditions, and is expected to close in the fourth quarter of 2005.
(i)Structure generated approximately $35 million of revenue and $5 million of Adjusted OIBDA(1) for the six months ended June 30, 2005.
“We are pleased that we have reached this agreement with Infocrossing, and believe both companies and their customers will benefit,” said Charles C. Miller III, Level 3’s chairman, Information Services Group. “Both companies bring IT outsourcing leadership, institutional excellence and a dedication to customer satisfaction to the industry. While we have been pleased with the performance of the (i)Structure subsidiary, the operation is not a core business for Level 3. Because of the strong fit with Infocrossing, we believe this combination makes a lot of sense for both companies.”
“We’re pleased with the prospect of joining forces with Infocrossing,” said Michael D. Jones, president and chief executive officer of (i)Structure. “We believe this transaction will bring valuable resources, reach and depth to both companies, and benefit our customers.”
As a result of the announcement of this transaction, Level 3 is evaluating the proposed initial public offering of its wholly owned subsidiary, Technology Spectrum, Inc., in connection with which it filed a registration statement on Form S-1 with the Securities and Exchange Commission in the second quarter of 2005.
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.
