Network operator Level 3 Communications
will spin off
its software and services group as a public company called Technology
Technology Spectrum will trade on the NASDAQ under the “TSPE” ticker symbol.
Neither the offering date nor share price has been set. Level 3 Financing,
another Level 3 subsidiary, is the sole seller of the stock and will receive
all the proceeds.
The new company will be based in Plano, Texas, and consist of two divisions
serving enterprise customers: Software Spectrum, a direct marketer of
software; and (i)Structure, a provider of IT infrastructure management
services. Both units were originally founded in the 1980s.
Technology Spectrum’s main business is licensing 18,000 software titles to
more than 5,600 corporate customers. According to regulatory filings, it’s
the largest reseller of Microsoft enterprise software in the United States
and also has deals with Adobe, IBM, Novell, Sun and others.
This segment is expected to stay strong. Technology Spectrum cited IDC
research predicting indirect enterprise software sales will outpace direct
sales over the next three years, with compound annual growth rates of 8.8
percent and 6 percent, respectively.
The other line of business for Technology Spectrum is IT infrastructure
management. The company operates data centers in Omaha, Neb., and Tempe,
Ariz., and provides a range of services to 43 corporate customers.
In 2004, the company posted an overall profit of approximately $10 million
on revenue of $1.93 billion.
Level 3 of Broomfield, Colo., formed its software and services group in
2002 after acquisitions. The IPO allows it to hone its focus. The
fiber-optic network operator sells wholesale dial-up service to ISPs in
North America and broadband access through cable and DSL providers.
It’s also moving to establish a strong position as a provider of Voice over
its VoIP application.
A Level 3 spokesman was not immediately available for comment.