November 28, 2002 — (WEB HOST INDUSTRY REVIEW) — Level 3 Communications, Inc. and Genuity Inc announced that they have signed a definitive agreement under which Level 3 will acquire substantially all of the assets of the Massachusetts-based communications company.
Level 3 will pay up to $242 million in cash and assume a significant portion of existing long-term operating agreements to acquire Genuity’s assets and operations. To facilitate the transaction, Genuity is filing voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code. Level 3′s cash consideration at closing could be reduced subject to certain material adjustments.
This transaction represents the best outcome for the key constituencies of both Genuity and Level 3,” said Paul R. Gudonis, chairman and chief executive officer of Genuity. “Both companies, as well as Genuity’s largest customers and creditors, have signed agreements supporting the transaction.
“We’re particularly pleased that all of the key parties have come together in support of this acquisition. For Genuity’s customers, the transaction will result in a stronger, financially sound, operationally reliable provider of communications services. For Genuity’s business partners, the agreement will help ensure business relationships continue with the least possible disruption. And for employees, this transaction offers the maximum possible opportunity for the greatest number of people. “
Level 3 and Genuity were reported to have agreed on a ‘pre-packaged’ bankruptcy filing by Genuity predicated on Level 3 assuming control of the company after its re-emergence from bankruptcy. Other bidders could step up after Genuity files for Chapter 11 protection.
Genuity operates a 17,500-mile global fiber-optic network, Black Rocket Web hosting and data services centers, and dial-up Internet facilities for America Online and other Internet service providers.
