A subsidiary of Broomfield-based Level 3 Communications on Tuesday announced plans to sell a computer maintenance unit to Infocrossing Inc. of New Jersey for $81.5 million.
The proposed deal for (i)Structure will be a combination of cash and $1.5 million of Infocrossing common stock, according to Level 3. It is expected to close by the end of the year, pending regulatory approval.
“This really gives us a foothold in the central United States,” said Michael Wilczak, an Infocrossing spokesman.
He said the roughly 300 employees of (i)Structure, including 130 in Broomfield, are expected to continue working in current offices in Colorado, Nebraska and Arizona. (I)Structure workers manage computer maintenance for other companies.
Level 3 decided to sell the unit because it is not a core business, said Charles Miller, chairman of Level 3’s information services group. The acquisition is expected to bring $76 million in revenue in the year following the sale.
(I)Structure generated about $35 million in revenue in the first six months of 2005, Level 3 said.
Telecom analyst Donna Jaegers at Janco Partners said the planned sale is a good move for Level 3, which has a 23,000-mile broadband fiber-optic network that offers customers wholesale dial-up and broadband Internet services. “It’s a good valuation,” Jaegers said of the sale price.
In a related measure, Level 3 announced that it planned to take subsidiary Technology Spectrum Inc. public following a registration filing with the Securities and Exchange Commission in the second quarter of this year.
