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Level 3 Buys Software Spectrum for $122 Million
Bandwidth vendor Level 3 Communications agreed yesterday to buy Dallas-based Software Spectrum, which delivers software via high-speed pipes, for $122 million in cash, its second acquisition this year.
In addition to synergistic arguments, the purchase provides sufficient revenues and profitability to ensure that Level 3 doesn't violate bank covenants related to its heavy debt. In the nine months ending January 31, Software Spectrum generated net income of $9.1 million on sales of $1.05 billion.
Level 3's CEO James Crowe says he believes broadband networks such as Software Spectrum's will emerge as the primary distribution medium for massive digital products.
Earlier this year, Level 3 announced its purchase of CorpSoft Inc. for a total consideration of about $140 million. Software Spectrum will be folded into the CorpSoft division.
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