Level 3 will also assume about $50 million in debt owed by its new unit. Corporate Software is privately held and has kept a relatively low profile. However, last
year it posted profitss (before taxes and restructuring charges) of nearly $18 million on sales of $1.1 billion.
Level 3 runs a high-speed network, but through its Structure subsidiary, provides software and services. Corporate Software sells
applications from Microsoft, IBM/Lotus, Novell, Sun Microsystems, Computer Associates, Symantec and others to 5,000 customers.
“The trend in software distribution has been to migrate away from physical distribution via disks or CD-ROMs toward distribution over broadband networks,” said
Howard Diamond, Corporate Software’s chairman and CEO. “We believe that the cost structure and operational capabilities of the Level 3 network will prove to be significant advantages.”
Corporate Software was founded in 1983 and employs 800 people. It will continue to be based in Norwood. The company’s existing management
team will also stay.
The deal is expected to close by the end of the first quarter, pending approval from regulators and shareholders.
“Corporate Software has built a global reputation for excellence, the best evidence of which is its impressive list of multi-national customers,” said James Q.
Crowe, Level 3’s CEO. “We want to capitalize on the knowledge and experience.”
Shares of LVLT soared on news of the acquisition and on an announcement that it will meet or beat quarterly guidance. Shares of LVLT shot up .65, or 26 percent,
to 3.1 at midday. In the last 52 weeks, the issue has ranged from 1.89 to 29.4357.