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  • Level 3 to Sell Midwest Fiber Optic Network
Aug 2003
BROOMFIELD, Colo., August 20 -- Level 3 Communications Inc. announced yesterday it has signed a definitive agreement to sell the Midwest Fiber Optic Network (MFON), a regional communications system it acquired through its recent transaction with Genuity Inc.

CenturyTel will buy the stand-alone system, which serves as a regional backbone for a number of carriers -- including CenturyTel -- in Arkansas, Missouri and Illinois. The purchase price is approximately $17 million in cash, subject to adjustments including date of closure and system revenue at time of close. Closing is subject to regulatory approvals and customary conditions.

"This is a noncore asset for Level 3," said Sunit Patel, Level 3's CFO. "While MFON currently generates approximately $1.5 million a month in revenue, the geography and architecture of the system do not offer us a practical or cost-effective way to integrate its operations into the Level 3 network. As such, we believe it makes sense to sell this business and continue to focus on the integration of the core assets, customers and traffic from the Genuity transaction."

Closing is expected to occur by the end of the fourth quarter of 2003.

Level 3 acquired Genuity, a Tier 1 internet protocol communications company based in Woburn, Mass., in February.

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