Level 3 completes acquisition of Global Crossing
04 October 2011 | Kavit Majithia
Level 3 communications has today completed the acquisition of Global Crossing, almost six months after first announcing the deal.
“Customers have been crying out for a company that has the breadth, services and portfolio that Level 3 offers in a more nimble, flexible and responsive manner than the incumbents are able to deliver,” stated Jeff Storey, president and COO at the company in a conference call to the media this morning.
The acquisition gives Level 3 an operating platform for medium to large enterprise, wholesale and content customers through a network spanning 165,000 fibre miles in intercity, metro and subsea links, spanning across 45 countries in three continents.
"Our enterprise is now a global, state-of-the-art communications company that is substantially bigger and financially stronger, with an unrivaled IP, optical network and global reach, and an entrepreneurial culture singularly focused on the customer experience," said James Q. Crowe, CEO at Level 3. "We believe the rapidly evolving communications market represents an extraordinary opportunity for us, and we are well positioned to capitalise on it."
As a result of the deal, Level 3 will now trade its common stock on the New York Stock Exchange (NYSE) and transfers from the NASDAQ global select market. The company has projected an additional revenue base annually of $300 million through expected synergies, with a majority of that redeemed over the next 12 months. Level 3 is also assuming approximately $1.35 billion of Global Crossing’s outstanding consolidated debt.
“The new company is financially strong and a stable provider,” said Storey. “Backbone networks have high fixed costs, and combining two overlapping backbone networks in to one drives cost synergies. To a large extent these savings also produce a more reliable network, by eliminating of net customers we can provide customers with more end-to-end cost net synergies with better service delivery times and higher reliability.”
Duncan Niederauer, CEO at NYSE Euronext welcomed Level 3 on its new stock exchange trading platform: “With this transaction, Level 3 affirms its position as a leading communications provider, and with its listing on the NYSE, we are proud to add Level 3 to our unparalleled community of issuers and our ever-growing population of top technology companies.”
To read more on the implications this deal will have on the market click here.