NEXTLINK, Concentric Form $2.9 Billion Broadband Company
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NEXTLINK Communications Inc. and Concentric Network Corp. Monday merged in a deal that creates a single broadband communications company focused on providing voice, data and Internet communications services.
The transaction is valued at approximately $2.9 billion and is expected to close in the second quarter.
In order to close the deal each share of Concentric Network (CNCX) common stock will be exchanged for $45 in NEXTLINK (NXLK) common stock. Concentric Network would hold approximately 17.8 percent of the combined company, which will operate under the Concentric brand name.
Dan Akerson, NEXTLINK chairman and chief executive officer, said the deal marked a monumental moment for NEXTLINK's strategic growth.
Henry R. Nothhaft, Concentric chief executive officer, said matching Concentric's Web hosting and e-commerce services with NEXTLINK's fiber optic and wireless facilities would make for a potent mixture of services in the marketplace.
"The integrated value proposition of the combination is clear," Nothhaft said.
Akerson added that the combined companies plan to aggressively pursue the nation's Fortune 1000 companies.
"We will have a very strong product set and a distribution network of both direct sales representatives and agents that will all be aimed at many of the largest and fastest growing customer segments in the business arena," Akerson said.
Akerson will remain chairman and chief executive officer the new company. Nothhaft will become a vice-chairman of the NEXTLINK board and be responsible for the company's retail Internet and data services
Both the NEXTLINK and Concentric Network board of directors have unanimously approved the deal. The transaction is subject to other customary closing conditions, including regulatory approvals.