In the two days since Level 3 announced an agreement to buy tw telecom, we’ve had time to develop some first impressions of the deal. Readers of this site know more about either or both companies than just about any audience out there, so what do you think? Pick two adjectives:
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Categories: Fiber Networks · Mergers and Acquisitions · Metro fiber · Polls
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I think it makes sense. We do business with both, and TWTC has always been great to work with and has a very nice network. I have said it before, but its obvious the growth over the next 5 years for metro is going to be huge, and those that have the fiber in the ground will do very well. Every quarter when the cable MSO’s release their earnings and give any details on fiber sales this is obvious, because they have a lot of depth in their given markets. You can look at the maps and see in a fair amount of markets L3’s metro isnt very deep, so in this case they can buy it cheaper than they can build it.
I think there is a fair amount of fear or concern out there between the players with all the consolidation going on, zayo buying everyone, Comcast buying TWC, etc, so they probably figured they should jump on it before someone else does.
Honestly would have preferred for TWTC to buy a buyer and get someone like Fibertech, but it is what it is. Lets just hope L3 doesn’t screw it up like the global crossing integration and they can continue to be profitable even with the extra debt load.
the tw IT guys know integration….hopefully they will be major players in making that happen quickly.
That makes a pretty big assumption that they want to integrate systems, which they have not done with any previous acquisition to any serious degree.
They know integration based on what experience? They’ve really only bought a couple companies over their life, none of any particular note.
Jeff Storey is not only astute, he is a great leader and exceptional businessman. Likely the best CEO in CO. There’s not a telecom executive out there today that could make this venture as successful as he will. This is great news for Level 3 and TWTC.
I echo that. Story is brilliant, I am so impressed.
Storey is a solid guy, but make no mistake, Sunit Patel deserves much the credit Level 3 is getting recently Sunit has navigated the bumpy waters for Level 3 for some time now, and I wish them both well with this adventure.
Agree. Both Crowe and Storey have done a good job cleaning house. The current management team is solid. Congratulations to all.
Agree. Sunit has done an excellent job. I can’t wait to see what financial brilliance happens next!
So when do the rates go up ?
At what point does someone give Jim Crowe a little credit. The FCF achieved/forecasted by Level 3, the strategic positioing of Level into a global power, the Financial maneuvers that kept Level 3 alive etc. This didnt happen in 1 year since Jeff Storey came in, the business is a big ship that was turned and finally on course when Crowe retired. Jeff Storey doing great but lets not forget even deals and negiations with TWTC take years to develop and likley was well in the works whne Crowe left. Just saying lets not act like Storey in 1 year has done all the lifting, this plan and evolution was laid out by Jim Crowe
Anyone know what Crowe is doing these days post Level (3)? I can’t say I am a huge fan of him mainly because I couldn’t trust him anymore and started really questioning his credibility and bold statements as time went on. He was definitely more of the overpromise, underdeliver type…unlike Storey which is what (3) needed. Crowe became too detached to the day to day operations it was obvious. However, I won’t ever diminish Crowe’s part in starting and building Level 3 and his initial role and vision and he did have to overcome a lot of hurdles over the years (Telecom bubble burst, Duopoly formed, recession, etc.) But, he made a ton of money along the way while in survival mode but unfortunately shareholders were diluted big time in the process.
It does appear (3) is FINALLY on the cusp of being a great company that could soon be making a lot of money. They seemed to actually be there already based on last qtrs. results so if this TWTC acquistion goes well they should be in a really, really good position in the Enterprise sector in a year or so. But, it is Level 3 so a chance of a botched integration always looms. However, I would hope by now they surely have learned valuable lessons over the years to prevent that.
Is Arthur Anderson their auditor? Just saying…
I agree with all your observations. I never cared much for Crowe, but he did have real vision and deserves credit for that vision. Unfortunately, he executed horribly and that overshadowed the vision thing.
I also agree that the risk of a botched integration looms large. Although LVLT appears to have navigated well the Global Crossing integration, their history on integration should give investors pause for concern.
No shortage of arrogance and pomposity exists in Broomfield, ground zero for LVLT’s center of gravity. The managers there have become quite adept at consolidating their power bases post merger by marginalizing good managers from target companies through titles changes and reporting lines. Although you expect that type of positioning after a merger, the Broomfield group scorched earth practice of cleaning house often and early at the target company’s HQ and major satellite offices leaves a sour taste among target company employees. So one can easily imagine a failed integration, especially on the heels of a successful one.
You are right. Jim Crowe does not get the credit he deserves. He hired and fired the right people during his tenure, keeping Level 3 afloat during an incredibly long and arduous recession and found and named his own replacement when the timing was right. At one time or another, all of the telecom CEOs called Jim Crowe boss and out of all of these, handpicking Jeff Storey was Jim’s smartest move yet. Congratulations to Jeff and Level 3.
Jim Crowe, the mastermind? I think not. His departure was among Wall Street’s happier days this decade.
I smell jealousy
Jealosy? Just pointing out that when your stock goes UP when you resign……..you ain’t well thought of!
Happy days for wall street. I thought they were feasting on his constant need to refinace, pay high rates, raise more for M&A is that not how they make money.
good luck to soon be ex tw employees and have fun trying to figure out the local plant.
Anyone paying attention realizes this deal isn’t about headcount synergies.
Level 3 reminds me of the “good old days” when Worldcom/LDDS was covering dirt with acquisition after acquisition. Wall Street loved Bernie until they didn’t. They made a fortune on his deals then abandoned him, for good reason. I recall the Wiltel acquisition that really screwed up a fine company. Wiltel was a diamond like TWT is now, but won’t be once it is consumed and forgotten. How long before Storey, etc get their due? Deja vu all over again.
If all rumors are true that Centurylink made run at TW, and Centurlink made run at Windstream( Jan 2014) and both deals cratered late in negotiations what is next for Cenrurylink ? Seems they may the natural for XO. And then does that leave Windstream without a suitor wand what woudl there move be, rollup rural like a Frontier ?
long-standing sibling rivalry between CTL and WIN.
Why isn’t CTL (or others) looking at TDS, which in turn gets them USCC, right? Try to offload the rural properties to someone else VZ-style and take any fiber assets w/ mobile and go compete.
Wall St thinks rackspace…
Ouch – I can say one thing since the announcement. Our prospects and customer’s opinion of this acquisition is unanimous literally almost 100 percent, Level 3 has the reputation for sucking at everything so they are bailing out or waiting. Do not blame them if I am in there shoes but not helping my numbers.
tw telecom rep- worried much? We only bought you for your conduit, everything else needs significant investment before it meets our standards. Your resold solutions pale in comparison to what Level 3 offers.
Level 3 arrogance on display. What happened to anti trust?
You two simmer down now. In a couple of weeks, we’ll be one happy family.
I, for one have have have gotten good feedback from customers as well as prospects in regards to this merger. This merger will consist of a 1st class airplane merging with a high speed limo.
Level 3 rep – while it may be true that level 3 is buying tw for the infrastructure, I believe they’re also buying not only that but for the culture as well as the local presence that tw provides.
Thats right , you just telling yourself that. Good luck.
Double LOL at Level 3 buying culture or good will in the markets. It goes with Larissa, and most of you are gone with her in 18 months.
LOL at Level 3 high standards!!!
Now, do I take the RED pill or the BLUE pill?
Lots of cynics around here. I’m curious to know how long everyone thinks it will take level 3 will start laying off people after this merger?
I don’t work for either nor in telecom for that matter so can’t speculate on cultures, egos, etc. However, looking at it from an Investment perspective if they pull this off without a hitch and they mesh together well then I certainly would want to own LVLT is all I can say and look forward to what the share price might be in a year (ish).
Agreed, though I’m sure it’ll take longer than a year.
Lots of cynics around here. I’m curious to know how long everyone thinks it will take level 3 will start laying off people after this merger?””’show
I am sure you are aware that lvlt has increased head count by 5% in the last six months. Sure doesnt seem like an action that implies massive layoffs. They did this at a time when upper management was in discussions to buy twtc. As for growth rates of lvlt and twtc, currently lvlt’s usa growth rate for enterprise is above twtc’s. I think the two companies will do fine together if that continues
Great input.