Qwest Communications will acquire network assets from Touch America and 360networks, enabling it to expand its national data network. Qwest recently won the right to offer long- distance data services to enterprise customers within its 14-state territory. Qwest said the assets from Touch America would allow it to support hundreds of Frame Relay and ATM customers. The assets from 360networks include fiber routes from Seattle to Billings, Montana.; from Billings, Montana to Denver; from Denver to Colorado Springs, Colorado.; and from Billings, Montana to Minneapolis. Financial terms were not disclosed. The agreements put an end to all outstanding disputes between Qwest and Touch America and 360networks regarding these assets. The deal is expected to close this year, pending bankruptcy court approval.
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- In June 2003, Touch America and all is subsidiaries filed voluntary Chapter 11 petitions in bankruptcy court. The company has received a commitment for a Debtor-in-Possession credit facility for $5 million from WLR Recovery Fund II, LP, a fund managed by WL Ross & Co. Touch America is undertaking various cost cutting measures, including staff reductions, and said it is planning for the smooth continuation of its business. At this time, Touch America also announced the sale of its Private Line and Dedicated Internet businesses to 360networks for $28 million. The sale proceeds will be used to pay pre- and post-filing obligations. 360networks is also financially backed by WL Ross & Co.
- In June 2000, Touch America acquired Qwest’s wholesale, private line and retail long-distance business in its regulated 14-state region.
- Touch America, which is based in Butte, Montana, resulted from the formation in 1983 of a telecommunications subsidiary of a diversified electric utility.
- In November 2002, 360networks emerged from bankruptcy protection with more than US$100 million of cash and US$215 million of bank debt (reduced from a pre-filing debt level of approximately US$2.7 billion). WL Ross & Co., a private equity firm, purchased debt securities that represent approximately 10% of the new equity in 360networks and 13% of its new bank debt. 360networks subsequently acquired Group Telecom, another Canadian service provider with 17 metro fiber networks. 360networks also acquired Dynegy’s North American intercity network, which spanned about 16,000 route miles. The two acquisitions extended 360networks’ optical mesh fiber network to 33,000 route miles (53,000 km) reaching 60 major cities in North America.