Qwest Communications agreed to acquire substantially all of the assets of Allegiance Telecom, a facilities-based national CLEC headquartered in Dallas, Texas for approximately $300 million in cash. In addition, Qwest will issue approximately $90 million of convertible debt. The deal includes networks in 36 metro markets across the U.S., 31 of which are outside the Qwest local service region. Allegiance Telecom, which filed for Chapter 11 bankruptcy protection in May 2003, currently carries approximately $550 million in telecommunications traffic annually. Qwest said it plans to combine and optimize this traffic -- with its existing network traffic. The deal requires approval of the bankruptcy court and certain other government regulatory agencies. In a bankruptcy court sale, other interested potential bidders will have an opportunity to offer higher bids for the assets of Allegiance.
"Upon closing of this transaction, Qwest will have more POPs than any other inter-exchange carrier in the U.S., allowing us to better serve existing customers and immediately expand our ability to serve more businesses than ever before," said Richard C. Notebaert, Qwest chairman and CEO.
http://www.qwest.com
http://www.algx.com
- Allegiance Telecom is headed by company co-founder Royce Holland, who previously was president and one of several co-founders of MFS Communications (acquired by WorldCom).
- For Q3 2003, Allegiance Telecom reported revenues of $188.2 million, a decrease of 4.3% compared with second quarter 2003 and a decrease of 14.3% compared with the third quarter of 2002.
