For more information:
NEXTLINK Contacts:
Todd Wolfenbarger (425) 519-3946
Nancy Bacchieri (425) 519-8940
Forstmann Little Contacts:
George Sard/Anna Cordasco
Sard Verbinnen & Co.
(212) 687-8080
FORSTMANN LITTLE TO INVEST $850 MILLION IN NEXTLINK
McLean, Va., and New York, December 8, 1999 -- NEXTLINK Communications Inc.
(Nasdaq: NXLK), one of the nation's premier facilities-based broadband
communications providers, and Forstmann Little & Co. today announced the signing
of an agreement under which Forstmann Little will invest $850 million in
NEXTLINK to be used to expand the Company's networks and services, introduce new
technologies and fund the Company's business plan.
Forstmann Little will invest approximately $850 million in NEXTLINK in the form
of convertible preferred stock with a conversion price of $63.25 per share and a
3.75 percent dividend. Under the agreement, Forstmann Little may convert to and
transfer the common stock after one year, and NEXTLINK may call the preferred
stock after five years. Forstmann Little will also have the option of requiring
redemption of the preferred stock after 10 years. The investment represents
ownership of approximately 8 percent of NEXTLINK's fully diluted common shares.
The transaction is subject to certain conditions and is expected to close in
early 2000. Nicholas C. Forstmann and Sandra J. Horbach, both general partners
at Forstmann Little, will join the NEXTLINK Board of Directors.
"NEXTLINK is uniquely positioned to become an industry leader with a developing
set of unrivaled broadband communications assets throughout the U.S.," said
NEXTLINK Chairman and Chief Executive Officer Dan Akerson. "Forstmann Little has
a proven history of making smart investments that deliver results. This
agreement is yet another validation of NEXTLINK's business strategy, and I am
personally very pleased to work with Forstmann Little once again."
"We believe there is a significant opportunity in the telecom sector," said
Nicholas Forstmann. "NEXTLINK owns an outstanding portfolio of
telecommunications assets, including exclusive interests in a 16,000 mile
inter-city fiber network currently under construction, robust local fiber
networks that are being operated or built in most of the top 30 markets
throughout the country, and licenses to more LMDS broadband wireless spectrum
than any other company in the United States."
"We are especially pleased to be working again with Dan Akerson, a former
Forstmann Little general partner," said Sandra Horbach. "He created significant
value when he led General Instrument, one of our former portfolio companies,
through a period of high growth in a rapidly
changing industry environment. He has done the same for Nextel, where he and
Craig McCaw have created an outstanding leader in the wireless
telecommunications industry."
NEXTLINK was founded in 1994 by telecommunications pioneer Craig McCaw to
provide high-quality, broadband communications services to businesses over fiber
optic and broadband wireless facilities across the United States. NEXTLINK
currently operates over 350,000 access lines and provides services in 48
markets.
NEXTLINK is the largest holder of broadband fixed-wireless spectrum in North
America, with licenses covering 95 percent of the population in the 30 largest
U.S. cities. NEXTLINK's fixed-wireless capabilities will complement and extend
the reach of its local fiber optic networks in the markets in which NEXTLINK has
spectrum.
NEXTLINK has also acquired exclusive rights to use certain fibers and a conduit
throughout a 16,000-mile high-speed, IP-centric fiber optic backbone network
that will connect over 50 cities in the United States and Canada. The network is
expected to be completed in 2001, with NEXTLINK turning on segments of the
network by late 1999. Through this unrivaled collection of facilities, NEXTLINK
will provide integrated, end-to-end telecommunications solutions to its
customers.
Since its founding in 1978, Forstmann Little has made 25 acquisitions and
significant equity investments, returning billions of dollars to its investors.
The firm's best-known investments include Gulfstream Aerospace, General
Instrument and Ziff-Davis Publishing. Current investments include Yankee Candle
Company (NYSE: YCC), the leading maker and marketer of premium candles;
Community Health Systems, a leading rural hospital company; McLeodUSA (NASDAQ:
MCLD), one of the fastest-growing integrated communications providers and
Intelisys Electronic Commerce, a pioneer in Internet-based business-to-business
procurement solutions. The firm currently has nearly $2 billion in committed
capital for future investments.
The Statements contained in this release, that are not historical facts are
"forward-looking statements" (as such term is defined in the Private Securities
Litigation Reform Act of 1995). Management wishes to caution the reader that
these forward-looking statements, regarding matters that are not historical
facts, are only predictions and are subject to risks and uncertainties. No
assurance can be given that the future results will be achieved. Such risks
include those identified in the Company's Form 10-K for the year ended December
31, 1998 and other reports and registration statements on file with the
Securities and Exchange Commission, and also include, but are not limited to,
the Company's ability to successfully market its services to current and new
customers, to design and construct fiber optic networks, install cable and
facilities, including switching electronics, to develop, install and provision
LMDS equipment and interconnect that equipment with the Company's fiber networks
and connect the networks, including LMDS equipment, to customers, and to
interconnect with existing local exchange carriers, all in a timely manner, at
reasonable costs and on satisfactory terms and conditions, and certain risks
related to the company's national network strategy.