Level 3 Communications to acquire TelCove Inc.

Level 3 Communications Inc. has said that they are planning to acquire privately held TelCove Inc.

The deal could be worth as much as USD 1.08 billion and it would be conducted in a cash and stock transaction.

This acquisition would give Level 3 access to an extended landline network and wireless airwaves licenses. The company added that the purchase price includes $637 million of stock and $445 million cash.

They would also be assuming $155.5 million of TelCove debt to complete the deal. Level 3 added that they are expecting TelCove to generate operating income before depreciation and amortization of $125 million to $135 million on revenue of $380 million to $400 million in 2006 on a stand-alone basis.

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