Time Warner Telecom to Acquire Xspedius for $531.5M
LITTLETON, Colo., July 28, 2006 -- Telecommunications service provider Time Warner Telecom Inc. announced it will acquire privately held Xspedius Communications LLC for $531.5 million in a cash and stock transaction.
Under the terms of the agreement, Time Warner Telecom will pay $212.5 million in cash and $319 million in shares of its Class A common stock. The company said it will assume no debt in the acquisition.
Xspedius, based in O'Fallon, Mo., provides integrated communications services to small- and medium-sized businesses in 43 markets across 18 primarily southern states and the District of Columbia. Time Warner Telecom President and CEO Larissa Herda said the acquisition will expand the company's network reach and market density for serving multilocation and multicity customers, increasing the number of markets it serves from 44 to 75.
Time Warner Telecom said it expects to spend $40 million to $50 million to integrate the businesses and expects to save that same amount within 12 to 18 months of closing through cost "synergies," achieved by interconnecting network assets and consolidating local and regional operations. The company did not say whether layoffs would be part of its cost-saving "synergies." Time Warner Telecom said it estimates that Xspedius' stand-alone operations will generate approximately $230 million to $250 million in revenue for 2007, before costs.
Closing is expected within six months, and is subject to customary conditions, including the federal and state regulatory approvals. The transaction has been approved by Xspedius Communications stockholders and does not require a Time Warner Telecom shareholder vote, the company said. For more information, visit: www.twtelecom.com
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