[Logo] Exhibit 99.1
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
Arthur Hodges
720-888-6184
Level 3 Signs Agreement to Acquire
Software Spectrum, Inc.
Global Software Services Provider Has Annual Revenues Exceeding $1 Billion
Acquisition Further Strengthens Level 3's Position in Information
Services Industry
BROOMFIELD, Colo., May 2, 2002 -- Level 3 Communications, Inc. (Nasdaq:LVLT)
announced today that it has signed a definitive agreement to acquire Software
Spectrum, Inc. (Nasdaq:SSPE), a global provider, marketer and reseller of
business software with revenue of approximately $1.3 billion and EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization) of $24 million
for the twelve months ending January 31, 2002. The aggregate purchase price is
approximately $122 million, adjusted for option proceeds and Software Spectrum's
current cash position.
Under the terms of the agreement, Software Spectrum stockholders will receive
$37 per share in cash and merge with a wholly owned subsidiary of Level 3
Communications. The merger is subject to approval by at least two thirds of
Software Spectrum
shareholders, as well as regulatory approvals and other customary closing
conditions. The transaction is expected to close in the third quarter of 2002.
"Over the past few months Level 3 has moved to significantly expand its
information services business," said James Q. Crowe, Level 3's chief executive
officer. "We are doing so in order to take advantage of important economic and
technology trends, including the continuing convergence of the broadband and
software distribution industries.
"The agreement announced today is a key part of that effort. Software Spectrum
is one of the nation's leading providers of software products and related
services to Fortune 500 enterprises and other businesses. We believe that
integrating their operations with those of our recently acquired Corporate
Software subsidiary will deliver a number of short and long term benefits to our
company and create value for our shareholders."
Based in Dallas, Texas, Software Spectrum sells and manages software products
from Microsoft, IBM/Lotus, Symantec, Adobe Systems and other leading software
publishers. The company markets to large and mid-size enterprises through sales
offices and operations centers in North America, Europe and the Asia-Pacific
region. The company has approximately 9,000 active customer accounts, including
approximately half the Fortune 500. The company currently employs approximately
2,200 people.
"This is a significant opportunity to provide a great value to our
shareholders," said Judy Odom, chairman and CEO of Software Spectrum. "We are
also excited about the long-term opportunities created as a result of combining
Software Spectrum and Corporate Software under the umbrella of Level 3 and its
significant broadband and technology capabilities."
Crowe said that the future of IT will be heavily influenced by long term
dynamics in communications. "Today, the entire structure of the IT industry is
based on three inter-related trends: low cost computing, low cost storage and
high cost communications,"
Crowe said. "As a result, enterprises are generally forced to expend capital on
their own in-house computing and storage systems at the point of use. Over time,
however, improvements in communications technology will continue to drive down
the price of moving information and allow businesses to buy software
functionality and data storage as a commercial service accessed remotely over
broadband networks. We believe Level 3's acquisition of both Software Spectrum
and Corporate Software will enable us to capitalize on this long term trend."
Paul Bazley, vice president of U.S. Enterprise and Partner Sales at Microsoft,
said this transaction brings together three strategic Microsoft partners. "Level
3 has an ambitious vision for changing the future of the software distribution
industry," Bazley said. "Level 3's acquisitions of both Corporate Software and
Software Spectrum will help make that vision a reality."
In March 2002, Level 3 completed the acquisition of Corporate Software, a
private software distribution company based in Norwood, Mass., with annual
revenues exceeding $1 billion. Howard Diamond, chief executive officer of
Corporate Software, said, "After closing, we will combine the strengths of both
Corporate Software and Software Spectrum. The new company will have breadth and
depth of capability and geographical reach that will be unique in the industry.
We expect to improve the companies' run-rate EBITDA by over $10 million within a
year of completing the acquisition through cost savings opportunities. We
believe this merger will enhance our opportunity to grow revenue and enable us
to become the global leader in improving the way companies acquire, implement
and manage software, while doing so at lower costs."
Crowe said the acquisitions will also produce benefits for Level 3's
(i)Structure subsidiary, which provides managed IT infrastructure services and
enables businesses to outsource their IT operations. "Both Software Spectrum and
Corporate Software have longstanding customer relationships with the world's
leading corporations," Crowe said. "We believe (i)Structure will be able to
leverage that customer base to achieve scale and grow its business going
forward."
About Software Spectrum
Software Spectrum is a global business-to-business software services provider
with sales locations, operations and contact centers throughout North America,
Europe and Asia/Pacific. The company provides enterprise software management and
contact center solutions that help organizations increase business value from
information technology. For more information, visit Software Spectrum's Web site
at www.softwarespectrum.com.
About Level 3 Communications
Level 3 (Nasdaq:LVLT) is an international communications and information
services company offering a wide selection of services including IP services,
broadband transport, colocation services and the industry's first Softswitch
based services. Its Web address is www.Level3.com.
The company offers information services through its wholly-owned subsidiaries,
(i)Structure and Corporate Software. (i)Structure is an Application
Infrastructure Provider that provides managed IT infrastructure services and
enables businesses to outsource IT operations. Its Web address is
www.i-structure.com.
Corporate Software helps Fortune 500 companies acquire, implement, and manage
software. Its Web address is www.corporatesoftware.com.
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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