CenturyLink Completes Acquisition of Level 3 Communications
CenturyLink has completed its acquisition of Level 3 Communications following the FCC’s final approval of the deal this week. The $24 billion deal, which was announced in November 2016, creates a new global network-services behemoth equipped with a large-scale, fiber-rich network. Level 3 is one of the largest providers of fiber and IP connectivity to U.S. sports venues and the broadcasters producing live coverage for television and streaming at these facilities.
CenturyLink will remain headquartered in Monroe, LA, with a key operational presence in Colorado and the Denver metropolitan area, where Level 3’s headquarters are located.
The combined company has an estimated pro forma revenue of $24 billion for the trailing 12 months ended June 30, 2017, (excluding revenue related to CenturyLink’s May 1, 2017, co-location business sale and including estimated intercompany eliminations and purchase-accounting adjustments) and expects that approximately 75% of its core revenue will come from business customers and nearly two-thirds of its core revenue will come from strategic services. CenturyLink’s network now connects more than 350 metropolitan areas with more than 100,000 fiber-enabled, on-net buildings, including 10,000 in EMEA and Latin America.
“CenturyLink is now poised to offer an expanded, robust portfolio of communications solutions focused on our customers’ networking and IT-services needs,” says CenturyLink CEO Glen F. Post III. “Our customers, from individual consumers to global enterprises, will benefit from our expanded, innovative network solutions, our complementary managed services, and our highly talented workforce.”
In June, it was announced that CenturyLink President/COO Jeff Storey will succeed Post as CEO effective Jan. 1, 2019, and that Post will then become executive chairman of the board. In June, Storey named his new executive leadership team. He has said he will remain in Colorado upon becoming CEO even though CenturyLink headquarters are in Monroe.
“Our goal is to be the world’s best networking provider, and we have the ability to achieve this as one company,” says Storey. “CenturyLink is focused on providing a differentiated experience for our customers, while driving profitable growth and increasing free cash flow per share. Our scale and experience will enable us to deliver on behalf of our customers, employees, and shareholders.”
CenturyLink expects the new entity will offer a broader, innovative product portfolio of network solutions and advanced IT services designed to meet complex technology and threat-protection needs, as well as deliver these solutions and services to enterprise, government, wholesale, and consumer customers over a large-scale, fiber-rich global network. In addition, the company will continue to invest in the reach and speeds of its broadband infrastructure for small businesses and consumers, according to its statement.
Holders of Level 3 common stock as of immediately prior to closing are entitled to receive $26.50 per share in cash (without interest) and 1.4286 shares of CenturyLink stock for each Level 3 share they owned. CenturyLink shareholders now own approximately 51% and former Level 3 stockholders approximately 49% of the combined company.