COMPANY PRESS RELEASE: McLeodUSA Incorporated has announced an agreement to sell certain of its internet/data assets and wholesale dial-up Internet Service Provider customer base (formerly part of Splitrock Services) to Level 3 Communications.
Under terms of the agreement, Level 3 will purchase approximately 350 POPs (points of presence) across the U.S., the related facilities, equipment and underlying circuits, plus the wholesale ISP customer base. McLeodUSA will retain its Level 3 fiber IRU. The parties will also enter into operating agreements enabling McLeodUSA to continue providing service and support to its in-region customers. McLeodUSA will receive $55 million in cash consideration. Level 3 will also assume certain operating liabilities associated with the assets.
We continue to focus on our 25-state footprint, selling non-core assets to raise cash, and achieving profitable growth, said Steve Gray, President and CEO of McLeodUSA Incorporated. This asset sale, along with the operating agreements with Level 3, is consistent with the plan we announced on October 3, 2001.
The transaction is subject to Hart-Scott-Rodino approval and customary closing conditions, and is expected to close during the first part of 2002.