Level 3 Communications To Buy Tw Telecom In $40.86/shr Cash, Stock Deal

(RTTNews) - Level 3 Communications, Inc. (LVLT) and tw telecom (TWTC) said they have entered into a definitive agreement for Level 3 to acquire tw telecom in a stock-and-cash transaction valued at $40.86 per share based on market close as of June 13.

The deal is valued at around $7.3 billion, including the assumption of $1.6 billion of net debt as of March 31, 2014. The deal is expected to close in the fourth quarter 2014.

tw telecom stockholders will receive $10 cash and 0.7 shares of Level 3 common stock for each share of tw telecom common stock that is owned at closing.

The combination leverages the complementary strengths of the two firms to create a stronger, more nimble, customer service-oriented competitor to meet customers' increasingly complex local, national and global communications needs.

The transaction is expected to create substantial total annualized synergies of $240 million, with $40 million from annualized capital expenditure savings and around $200 million of annualized Adjusted EBITDA savings.

Sunit Patel, executive vice president and chief financial officer of Level 3, said, ''The transaction is attractive from a financial perspective, as it is deleveraging and is accretive to Free Cash Flow per share after the first year.''