Exhibit 99.1
[Logo]
1025 Eldorado Boulevard
Broomfield, Colorado 80021
www.Level3.com
NEWS RELEASE
Level 3 contacts:
Media: Josh Howell Investors: Robin Grey
720-888-2517 720-888-2518
Level 3 to Acquire Corporate Software
Leading Distributor of Business Software Had 2001 Revenues
of Approximately $1.1 Billion
Acquisition Strengthens Level 3's Position in
Information Services Industry
BROOMFIELD, Colo., February 25, 2002 -- Level 3 Communications, Inc.
(Nasdaq:LVLT) today announced it has signed a definitive agreement to acquire
CorpSoft, Inc., a major distributor, marketer and reseller of business software,
which conducts its business under the name Corporate Software.
Level 3 will pay approximately $89 million in cash to acquire the equity of
Corporate Software. At the time of closing, it is anticipated that Corporate
Software will have debt obligations, net of cash, of approximately $50 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, MA, Corporate Software is an industry leader in the field of
software marketing, procurement and license management. It is a leading
distributor of software products from Microsoft, IBM/Lotus, Novell, Sun
Microsystems, Computer Associates, Symantec and 200 other software publishers,
and serves more than 5,000 business customers in 128 countries. Corporate
Software counts half the Fortune 500 among its existing customer base.
"This transaction affords a number of distinct advantages to Level 3," said
James Q. Crowe, Level 3's chief executive officer of Level 3. "Through our
(i)Structure subsidiary, Level 3 already provides a variety of information
technology services to major companies operating in North America. This
acquisition will enable (i)Structure to attain scale and to leverage Corporate
Software's customer base, worldwide presence and IT professional relationships
as it expands its portfolio of services.
"Under Level 3's ownership, Corporate Software will continue to deliver the same
high-quality products and services that it currently offers the marketplace, and
will leverage its new relationship with us to expand its value proposition to
existing and new customers. We also believe that the nature of software
distribution will evolve now that broadband communication services are widely
available."
Paul Bazley, vice president of U.S. Enterprise and Partner Sales at Microsoft,
said, "We are fully supportive of this transaction. Microsoft and Level 3 share
a common view on the direction of the broadband and the software distribution
industries, and we believe our interests are closely aligned. We value our
relationships with both Corporate Software and Level 3 and look forward to
working with them in the future."
Commenting further on the transaction, Crowe noted the reputation Corporate
Software has built over the years. "Since 1983, Corporate Software has built a
global reputation for excellence, the best evidence of which is its impressive
list of multi-national customers. We want to capitalize on the knowledge and
experience the team at Corporate Software has gained over almost two decades in
the software, license procurement, management and distribution business."
Howard Diamond, chairman and chief executive of Corporate Software, commented on
the continuing convergence of the broadband and software distribution
industries. "For the past few years, the trend in software distribution has been
to migrate away from physical distribution via disks or CD-ROMs toward
distribution over broadband networks. We believe that the cost structure and
operational capabilities of the Level 3 network will prove to be significant
advantages to Corporate Software as it expands its software distribution
business. Equally important, it will enable us to continue fulfilling our
mission of making it exceedingly easy for customers to do business with us
around the world, by enhancing our customers' ability to cost-effectively and
quickly obtain 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 after the transaction closes.
The transaction is subject to governmental clearance and customary closing
conditions and is expected to close by the end of the first quarter.
Level 3 will hold an investor conference call to discuss the transaction and to
provide a financial update at 11 a.m. eastern time today. The dial-in numbers
are (651) 291-0900 and (612) 338-1917. Additionally, the conference call will be
webcast on Level 3's website, www.Level3.com. A replay of the conference call
will be available until Wednesday, February 27, 2002 at (320) 365-3844, access
code 629107, as well as on Level 3s web site, www.Level3.com.
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 worlds
foremost software and services providers. Based in Norwood, MA, Corporate
Softwares annual worldwide revenues exceed $1 billion. For more information,
visit www.corpsoft.com.
About Level 3 Communications
Level 3 (Nasdaq:LVLT) is a global communications and information services
company offering a wide selection of services including IP services, broadband
transport, colocation services and the industrys first Softswitch based
services. Its Web address is www.Level3.com.
Corporate Software is a registered trademark of CorpSoft, Inc.
Forward Looking Statement
Some of the statements made by Level 3 in this press release are forward-looking
in nature. Actual results may differ materially from those projected in
forward-looking statements. Level 3 believes that its primary risk factors
include, but are not limited to: changes in the overall economy relating to,
among other things, the September 11 attacks and subsequent events, substantial
capital requirements; development of effective internal processes and systems;
the ability to attract and retain high quality employees; technology; the number
and size of competitors in its markets; law and regulatory policy; and the mix
of products and services offered in the company's target markets. 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 release should be evaluated in light of these important factors.
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