Level 3 Acquires Servecast

Level 3
Communications, Inc. announced that its operating subsidiary has acquired
Servecast Limited, a Dublin-based provider of live and on-demand video
management and streaming services for broadband and mobile platforms. Level 3
has paid approximately Euro 33 million, the equivalent of approximately $45
million, in cash to complete the acquisition of Servecast.

Founded in
1998, Servecast offers proven publishing and distribution tools for video
rights holders to monetize their digital assets. These tools enable customers
to manage, protect, deliver and track online audio and video content. Servecast
provides an easy-to-use platform that supports multiple stream rates,
languages, currencies and formats, including Adobe Flash, Real Player,
Windows Media Player and Apple QuickTime. Servecast’s capabilities have
been developed for easy adaptation to emerging video formats and other content
delivery technology.

“Servecast’s
video and rights management platform, combined with its streaming services
complement Level 3’s existing portfolio of content delivery capabilities,”
said Brady Rafuse, president of Level 3’s Content Markets Group and European
Markets Group. “The addition of these services accelerates our planned
development of this technology. These capabilities will enable us to manage and
distribute online video content in multiple formats to meet the increasing
demand for high-quality video over the Internet.”

We are
excited to be joining Level 3,” said Darach Deehan, chief executive
officer of Servecast. “We believe Level 3’s scale and capabilities across Europe
and
North America will provide our customers
an important opportunity to access new markets.”

“We
are confident in our ability to continue offering Servecast’s customers
high-quality service as we incorporate these key capabilities into our
portfolio and expand the availability of these services to additional markets
in Europe and into new markets in North America,” said Rafuse. “This
is a strategic capabilities acquisition that does not require the type of
physical integration associated with our larger, previously announced metro and
backbone transactions.”

Level 3
plans to maintain Servecast’s headquarters and broadcast operations center in
Dublin, as well as its data centers in
London
and

Amsterdam.
Servecast’s existing streaming server sites throughout Europe and
North America will also be incorporated into Level 3’s Content
Delivery Network.

Servecast
had approximately $5 million in annual revenue for 2006. IBI Corporate Finance
advised Servecast in relation to the transaction.