Level 3 Communications is purchasing an Irish Internet broadcasting company, continuing its aggressive acquisition strategy.
Broomfield-based Level 3 will pay about $40 million for Servecast, according to The Irish Times.
Level 3 declined to comment Tuesday.
Servecast, founded in 1998, streams sports events and other content over broadband and wireless connections. The Dublin, Ireland-based company has deals with teams such as soccer’s Liverpool and Manchester United and sporting events such as the Tour de France bicycle race.
Level 3 operates a global fiber-optic communications network that provides broadband connections for businesses.
The company has spent roughly $3.9 billion since late 2005 on seven acquisitions. For the most part, Level 3 has targeted companies that offer fiber connections into buildings in major metro areas or smaller network providers.
The company, however, also acquired the content-delivery arm of hosting company Savvis.
Level 3 stock dropped 5 percent Tuesday after an analyst said he expects the company to lower earnings guidance for 2007 when it announces second-quarter financial results in two weeks.
Buckingham Research Group analyst Qaisar Hasan lowered his forecast for Level 3’s earnings before interest, taxes, depreciation and amortization from $899 million to $819 million.
Hasan cited possible cutbacks in wholesale spending by carriers such as Verizon Communications, a major Level 3 customer, and growing competition from XO Communications.
He also said Level 3 stock has risen nearly 20 percent in recent weeks “without cause.” Level 3 stock closed Tuesday at $6.09, down 32 cents.
“We remain cautious on (Level 3) in the near term, and believe there is real risk to the company lowering its full-year EBITDA,” Hasan wrote in a research note.
Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.
