Exhibit 99.1
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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
Chris Hardman Sandra Curlander
720-888-2292 720-888-2501
Level 3 to Acquire ICG Communications
Purchase Price of $163 Million Includes $127 Million in Unregistered
Shares of Level 3 Common Stock and $36
Million in Cash
Acquisition Expands Level 3's Transport, IP and Voice Businesses;
Extends Network Reach
BROOMFIELD, Colo., April 17, 2006 - Level 3 Communications, Inc. (Nasdaq:LVLT)
today announced that it has signed a definitive agreement to acquire all of the
stock of ICG Communications, Inc., a privately held Colorado-based
telecommunications company. Under terms of the agreement, Level 3 will pay total
consideration of $163 million, consisting of $127 million in unregistered shares
of Level 3 common stock and $36 million in cash. The number of shares to be
delivered will be determined immediately prior to closing.
ICG primarily provides transport, IP and voice services to wireline and wireless
carriers, Internet service providers and enterprise customers. ICG's network has
over 2,000 metro and regional fiber miles in Colorado and Ohio and includes
approximately 500 points of presence. ICG serves more than 1,600 customers.
"ICG is a well-run business with a strong and growing base of customers," said
Kevin O'Hara, president and chief operating officer of Level 3. "This
transaction gives Level 3 the opportunity to further expand our footprint into
areas where we see demand for our services, and to realize cost savings."
"Level 3 has an excellent reputation in the communications industry," said Dan
Caruso, president and chief executive officer of ICG Communications. "We believe
our customers and employees will be in good hands. ICG and its customers will
benefit greatly from access to Level 3's expansive network and its broad suite
of communications services. We look forward to working with the Level 3 team."
"ICG standalone is expected to generate approximately $75 to $80 million of
annualized revenue and approximately $10 to $15 million of annualized positive
cash flow after approximately $10 million in capital expenditures," said Sunit
S. Patel, chief financial officer of Level 3 Communications. "We expect
annualized cash flow to improve to approximately $30 to $40 million once we have
completed integration, which is expected to begin later this year."
The purchase price is subject to certain customary working capital adjustments.
Level 3 has the right to substitute cash in lieu of delivering shares of its
common stock. The transaction does not include ICG's investments in New Global
Telecom or Mpower Holding Corporation. Closing is expected to occur mid-year
2006 and is subject to customary closing conditions, including receipt of
applicable state and federal regulatory approvals.
Level 3 expects to provide additional information concerning this transaction
during its first quarter 2006 earnings call scheduled for Tuesday, April 25,
2006, at 10 a.m. EDT.
About Level 3 Communications
Level 3 (Nasdaq:LVLT) is an international communications and information
services company. The company operates one of the largest Internet backbones in
the world, is one of the largest providers of wholesale dial-up service to ISPs
in North America and through its customers, is the primary provider of Internet
connectivity for millions of broadband subscribers. The company offers a wide
range of communications services over its broadband fiber optic network
including Internet Protocol (IP) services, broadband transport and
infrastructure services, colocation services, and patented softswitch managed
modem and voice services. Its Web address is www.Level3.com. The company offers
information services through its subsidiary, Software Spectrum, and fiber-optic
and satellite video delivery solutions through its subsidiary, Vyvx. For
additional information, visit their respective Web sites at
www.softwarespectrum.com and www.vyvx.com.
The Level 3 logo is a registered service mark of Level 3 Communications, Inc. in
the United States and/or other countries. Level 3 services are provided by a
wholly owned subsidiary of Level 3 Communications, 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: increasing the volume of traffic on Level 3's
network; developing new products and services that meet customer demands and
generate acceptable margins; successfully completing commercial testing of new
technology and information systems to support new products and services,
including voice transmission services; stabilizing or reducing the rate of price
compression on certain of our communications services; integrating strategic
acquisitions; attracting and retaining qualified management and other personnel;
ability to meet all of the terms and conditions of our debt obligations;
overcoming Software Spectrum's reliance on financial incentives, volume
discounts and marketing funds from software publishers; and reducing downward
pressure of Software Spectrum's margins as a result of the use of volume
licensing and maintenance agreements. 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.