BROOMFIELD, Colo. -- Level 3 Communications, Inc. (Nasdaq: LVLT - news) 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.
"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."
In a separate release:Level 3 Communications, Inc. (Nasdaq: LVLT - news) today announced that it has signed a definitive agreement to acquire CorpSoft, Inc., which conducts business under the name Corporate Software. As a result of this transaction, the company is updating certain financial information. Financial Projections: Level 3 expects to meet or exceed first quarter 2002 financial projections provided on January 29, including positive Consolidated EBITDA for the first quarter. The company plans to provide full year 2002 projections in April in conjunction with reporting its first quarter 2002 results. Credit Facility: The company has a $1.775 billion senior secured credit facility. Currently, $1.125 billion of the $1.775 billion senior secured credit facility is drawn. The balance represents the undrawn $650 million revolving credit facility. "Taking into account all recent transactions and events," said James Q. Crowe, CEO of Level 3, "We believe that Level 3 remains fully funded to free cash flow breakeven with a substantial cushion in accordance with our business plan, even if our current rate of sales does not improve over time." Level 3 Communications Inc.