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.
“We have combined NEXTLINK’s rapidly growing local and long distance
businesses and strategic broadband network assets with one of the nation’s
leading web hosting and Internet data services companies,” Akerson said.
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 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.