updated 5/1/2006 8:01:05 AM ET 2006-05-01T12:01:05

Internet services provider Level 3 Communications Inc. on Monday agreed to acquire privately held TelCove Inc., a regional telecommunications company, for about $1.08 billion in cash and stock.

Level 3, of Broomfield, Colo., will pay $637 million in shares and $445 million in cash. Level 3 would also assume $155.5 million in TeleCove debt in the deal.

The number of shares issued to cover the stock portion of the deal will be between 111 million and 166 million, depending on Level 3's average share price in a period prior to closing. The company had 821.9 million basic shares outstanding at the end of the first quarter.

Pennsylvania-based TelCove has annual revenue of about $390 million, Level 3 said, adding it expects that revenue to increase annually by about 10 percent to 12 percent, with gross margins of more than 80 percent.

Level 3 expects to book integration costs of about $75 million, primarily in 2007.

Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.93%
$30K home equity loan FICO 5.20%
$75K home equity loan FICO 4.58%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.40%
Cash Back Cards 17.92%
17.91%
Rewards Cards 17.13%
17.11%
Source: Bankrate.com