Level 3 buys stake in Progress Telecom
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St. Petersburg Times (Florida)
By Helen Huntley
Telecom, a fiber-optic cable company, employs 122 people in St. Petersburg.
Progress Energy Inc. is selling its stake in St. Petersburg-based Progress Telecom LLC to Level 3 Communications Inc. in a $137-million deal announced Thursday.
The telecom company owns 9,000 miles of fiber-optic cable networks that are leased to 200 wholesale customers such as wireless carriers and Internet service providers. It is jointly owned by Progress Energy and Odyssey Telecorp Inc. Progress Energy will remain its largest customer, using the network for internal communications.
Level 3, which is in the same business, said it will pay half the purchase price in cash and half in unregistered shares of Level 3 stock.
Progress Telecom, which has about $70-million in annual revenues, employs 165 people, 122 of them in St. Petersburg. There are no immediate plans to cut jobs, but Level 3 said it expects "cost synergies" to emerge.
Progress Telecom chief executive Ronald Mudry said his customers will benefit from expanded access to Level 3's international network and broader service offerings.
"We do actually generate cash and to the extent we continue to do that, we will continue to be operational as a business unit of Level 3," said Elizabeth Vanneste, senior vice president.
Level 3 executives said they are enthusiastic about expanding in the southeast. The company is based in Broomfield, Colo.