XO Communications Completes Acquisition of Allegiance Telecom
24 June 2004
RESTON, Va.-- June 23, 2004 -- XO Communications, Inc. (OTCBB:XOCM.OB) today announced that it has completed its acquisition of the Allegiance Telecom assets, creating the nation's largest provider of national local telecommunications services focused exclusively on businesses. The purchase price for the acquisition was $322.0 million of cash, including $11 million of adjustments for working capital, and approximately 45.4 million shares of XO common stock. In addition, XO and Allegiance have resolved a number of related disputes, and the Bankruptcy Court's approval of that settlement agreement is expected shortly.
"The new XO will have the scale and size to serve even more business customers for their local and national telecommunications needs and provide a more cost-effective alternative to the incumbents," said Carl Grivner, CEO of XO Communications. "The combination of our assets and services not only strengthens XO's ability to serve more business customers but significantly enhances our position as a provider of wholesale local access services to other telecommunications companies."
The acquisition of Allegiance Telecom significantly expands XO's local market coverage across the country, allowing XO to serve an even greater number of business customers with voice, data and Internet services. XO's network will now have more than 900 local Points of Presence (PoPs). The expansion will increase XO's local presence in many of the largest markets in the U.S., including Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco and Washington, DC. In addition to an enhanced ability to serve a wider business market, XO will also be better positioned to sell local access services to other telecommunications carriers that may require local network access to service their end user customers.
XO continues to expect to be able to achieve over time approximately $160 million in annual synergies as a result of the acquisition. "The improvements are expected to reduce our costs and expedite XO's path to profitability," said Wayne Rehberger, chief operating officer of XO Communications. "We have already initiated a number of network, operational and systems integration initiatives."
With the addition of Allegiance's services, including its specialized services for small-to-medium sized businesses, the new XO will be able to offer an even broader range of services to businesses of all sizes. XO's portfolio of services includes local and long distance voice, dedicated Internet access, private networking, data transport and web hosting services as well as bundled voice and Internet solutions.
About XO Communications
XO Communications is a leading provider of national and local telecommunications services to businesses, large enterprises and telecommunications companies. XO offers a complete portfolio of services, including local and long distance voice, dedicated Internet access, private networking, data transport, and Web hosting services as well as bundled voice and Internet solutions. XO provides these services over an advanced, national facilities-based IP network and serves more than 70 metropolitan markets across the United States. For more information, visit www.xo.com.
