BROOMFIELD, Colo., Dec. 19 -- Level 3 Communications, Inc. (NASDAQ:LVLT) today announced that it has signed a definitive agreement to sell the advertising distribution business of Vyvx LLC to DG FastChannel, Inc. Vyvx, LLC is a wholly owned subsidiary of Level 3 Communications, LLC.
Under the terms of the agreement, Level 3 will receive total consideration of $129 million payable in cash at closing. The purchase price is subject to customary working capital and certain other post-closing adjustments. Revenue and Adjusted EBITDA for the Vyvx Services Advertising Distribution Business for 2007 are expected to be approximately $36 million and $11 million, respectively.
Level 3 will retain ownership of Vyvx, LLC and its core broadcast business including all of the Vyvx Services Broadcast Business' content distribution capabilities. Level 3 will also retain an ongoing network services relationship with DG FastChannel, enabling DG FastChannel to distribute advertising content between its regional offices.
"We are pleased that we have reached this agreement with DG FastChannel," said Brady Rafuse, president of Level 3's Content Markets Group. "The Vyvx Services Advertising Distribution Business is not core to Level 3's strategy as it relies primarily on satellite and physical dub and ship methods for distribution and does not utilize the Level 3 network to deliver content to end destinations. We are focused on services that enable the distribution of large volumes of content over the Level 3 network. Additionally, Level 3's core communications services continue to grow and represent attractive future growth opportunities. The proceeds from the sale of the Vyvx Services Advertising Distribution Business will be deployed toward opportunities that are more central to Level 3's communications business."
The sale is subject to regulatory approvals as well as certain other customary closing conditions, and is expected to close in the first quarter of 2008.
About Level 3 Communications
Level 3 Communications, Inc. (NASDAQ:LVLT), an international communications company, operates one of the largest Internet backbones in the world, connecting 180 markets in 18 countries. The company serves a broad range of wholesale, enterprise and content customers with a comprehensive suite of services including: Internet Protocol (IP) services, broadband transport and infrastructure services, colocation services, voice and voice over IP services, and content delivery and media distribution services. These services provide the building blocks to enable Level 3's customers to meet their growing demands for advanced communications solutions. The company's Web address is http://www.level3.com/.
Source: Level 3 Communications, Inc.
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Web site: http://www.level3.com/