Colorado-based Level 3 Communications has announced that it has agreed a deal to acquire national enterprise provider tw telecom in a stock-and-cash transaction valued at USD40.86 per share. The transaction, which values tw at around USD7.3 billion, represents a premium of 12% on the telco’s closing share price of USD36.34 on Friday 13 June.
Level 3 estimates that, going forward, the net value of potential synergies will be approximately USD2 billion. The company expects to realise approximately 70% of its expected adjusted EBITDA savings within 18 months after closing the transaction. In addition to customary closing conditions, the transaction is subject to regulatory approvals relating to competition law and licensing, including approvals by the Federal Communications Commission (FCC) and other state regulatory agencies. The deal is expected to close in the fourth quarter 2014.
Jeff Storey, president and CEO at Level 3, commented: ‘We believe this is a financially compelling and very strategic acquisition for Level 3 that will enhance our ability to gain market share. The transaction further solidifies Level 3’s position as a premier global communications provider to the enterprise, government and carrier market, combining tw telecom’s extensive local operations and assets in North America with Level 3’s global assets and capabilities.’