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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 28, 2000
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NEXTLINK Communications, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 000-22939 91-1738221
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1505 Farm Credit Drive, McLean, Virginia 22102
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (703) 547-2000
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
NEXTLINK Communications, Inc. announced today an agreement in principle to
purchase multiple European metro fiber optic networks, an inter-city Pan
European fiber optic network and transatlantic fiber-optic capacity for $306
million. NEXTLINK's press release announcing the transaction, filed herewith as
Exhibit 99.1, is incorporated herein by reference.
NEXTLINK Communications, Inc. and Forstmann Little & Co. also announced today
the signing of a commitment letter under which Forstmann Little will invest,
through the purchase of NEXTLINK convertible preferred stock, an additional $400
million in NEXTLINK to fund its business plan, to expand its network and
services, including its domestic and international networks, and to introduce
new technologies. NEXTLINK's press release announcing the commitment, filed
herewith as Exhibit 99.2, is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
The following exhibits are filed as part of this report:
99.1 Press Release, dated May 23, 2000.
99.2 Press Release, dated May 23, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NEXTLINK COMMUNICATIONS, INC.
By: /s/ Gary D. Begeman
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Gary D. Begeman
Senior Vice President
and General Counsel
Dated: May 23, 2000
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Exhibit Index
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Exhibit No. Description
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99.1 Press Release, dated May 23, 2000.
99.2 Press Release, dated May 23, 2000.
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NEXTLINK PURCHASES PAN EUROPEAN METRO AND INTERCITY FIBER
NETWORKS AND TRANSATLANTIC CABLE FROM LEVEL 3 COMMUNICATIONS
FOR $306 MILLION
McLean, VA. (May 23, 2000) -- NEXTLINK Communications, Inc. (NASDAQ:NXLK),
one of the world's fastest growing broadband communications companies, announced
today it has agreed in principle to purchase multiple European metro fiber optic
networks, an inter-city Pan European fiber optic network and transatlantic fiber
optic capacity for $306 million. The expansion of the network resulting from the
transaction will approximately double NEXTLINK's global market opportunity and
will give the company end-to-end network capabilities in the United States,
Canada and throughout much of Europe.
The local components of the NEXTLINK European network will consist of
robust metro fiber facilities that include several empty fiber optic conduits in
London, Frankfurt, Amsterdam and Brussels, and fibers in Paris. Each empty
conduit is currently capable of holding at least 432 fibers using current fiber
optic technology. Once complete, NEXTLINK will own nearly 250 metro route miles
and more than 80,000 metro fiber miles in Europe. These local metro networks are
expected to be delivered to NEXTLINK in late 2000 and ready to offer commercial
service in the first half of 2001.
A high capacity, IP-centric NEXTLINK inter-city network of 24
state-of-the-art fibers will connect NEXTLINK's metro European networks. These
fibers will be the most technologically advanced Corning G.655 LEAF fiber
capable of delivering 19.2 terabits of transmission capacity using today's
technologies and are expected to be capable of delivering vastly more capacity
in the future as new generations of transmission equipment become available.
<PAGE>
This inter-city fiber network that will total nearly 3,700 route miles and
more than 88,000 fiber miles will connect 21 major European cities and includes
redundant undersea routes between England and Belgium and "dry" Eurotunnel links
between England and France. Additionally, NEXTLINK will receive one empty
conduit throughout the European inter-city fiber network and options to receive
certain additional fibers installed in the inter-city network in the future. The
inter-city portion of the NEXTLINK European network is expected to be delivered
to NEXTLINK in late 2000 and be ready to offer commercial service in the first
half of 2001.
The NEXTLINK European network will be complemented by transatlantic
capacity connecting NEXTLINK's European customers to North America. The initial
purchase capacity will be 2.5 Gbps of transatlantic transmission capacity that
will be expanded to 10 Gbps at the end of 2002. Today, according to the
International Telecommunications Union (ITU) and Telegeography, current
transatlantic Internet traffic totals under 14 Gbps.
"This strategic transaction will double NEXTLINK's market opportunity by
positioning us to pursue the rapidly growing European broadband marketplace,"
said NEXTLINK Chairman and Chief Executive Officer Dan Akerson. "It is a natural
extension of NEXTLINK's North American, facilities based strategy bringing us
into Europe at a relatively low cost of entry. We have agreed to purchase these
networks from Level 3 Communications who is a trusted and respected partner of
NEXTLINK and has always excelled in constructing fiber networks throughout the
world."
"Level 3 is committed to enabling the rapid evolution of a new global
Internet economy by building high-capacity connections between key markets in
Europe and the United States," said Gail Smith, president of Level 3
Communications Europe. "NEXTLINK is a company we respect highly and we are happy
to build on our existing relationship in the United States by providing the
infrastructure they need to roll-out their European network plans."
Earlier this year, NEXTLINK took steps to establish an initial "beachhead"
in Europe by announcing a merger with Concentric Network Corporation
(NASDAQ:CNCX). Concentric's European division includes one of the largest
Internet Service Providers (ISP) in the United Kingdom, with peering
relationships with most of the Tier 1 European ISPs.
<PAGE>
Concentric currently operates two data centers in the United Kingdom, one
in Amsterdam and has plans to build a data center in Paris. Upon completion of
the NEXTLINK/Concentric merger, NEXTLINK plans to connect these data centers
through its planned European networks, enabling the company to operate as a
complete facilities based applications infrastructure provider (AIP) serving
other ISPs and application service providers (ASP) across Europe. Additionally,
Concentric currently leases a fiber network throughout the United Kingdom with
35 points of presence (POPs).
NEXTLINK expects to take advantage of its European network by offering a
data product to European ISPs and Internet-centric customers with enhanced
access to the Internet. Today, many European ISPs purchase international private
lines to the United States and an Internet "port" connection to connect their
customers to the U.S. web sites. Through NEXTLINK's planned domestic and pan
European and transatlantic capacity and Tier 1 peering relationships via the
pending Concentric merger, NEXTLINK will be able to offer European ISPs an
Internet product that is expected to deliver a higher quality Internet
experience to end users. Internet traffic destined for European sites will stay
in Europe, while traffic going to the U.S. web sites will be delivered through
superior Tier 1 peering connections.
Once the NEXTLINK European networks are complete, it will also accelerate
NEXTLINK's ability to offer virtual private network (VPN) solutions in Europe.
NEXTLINK's local network facilities will also allow the company to become an
early European data local exchange carrier (DLEC). Already, Concentric has been
selected by British Telecom and has begun early tests for digital subscriber
line (DSL) service in the United Kingdom.
"In addition to the obvious long-term strategic importance of this
transaction to NEXTLINK, we also see near-term marketing opportunities that will
utilize the European network as it comes on-line," continued Akerson. "We now
have significant international experience at the executive level at NEXTLINK,
and that expertise, combined with unrivaled broadband network assets throughout
North America and Europe, will allow NEXTLINK to effectively serve small, medium
and Fortune 1000 customers at a local and global level."
Once the NEXTLINK / Concentric merger closes, the company will have more
than 400 employees in Europe which is expected to grow to roughly 600 employees
by the end of 2001. NEXTLINK's European headquarters will be located in London.
<PAGE>
Upon completion of the transaction with Level 3, which is subject to the
parties negotiating and entering into definitive agreements, NEXTLINK will
become one of the most broadband facilities-rich companies in the world. In
addition to the European network facilities that will be acquired in the
transaction announced today, NEXTLINK currently operates over 410,000 metro
fiber miles in the United States and has began taking delivery of a 384,000+
fiber mile, inter-city fiber network connecting more than 65 cities in North
America. NEXTLINK also owns one empty conduit throughout its North American
inter-city network and rights to additional fibers. The company has a strong
position in delivering last or "golden" mile facilities connecting its U.S.
metro networks to the customer's premises. These capabilities include metro
fiber, broadband wireless and facilities-based digital subscriber line (DSL)
connections.
NEXTLINK Communications, Inc., a McLean, VA-based company, provides high
quality, broadband communications services to businesses over fiber optic and
broadband wireless facilities across the United States. NEXTLINK currently
provides service in 49 markets. Through an unrivaled collection of facilities,
NEXTLINK will provide integrated, end-to-end telecommunications solutions to its
customers. For more information, visit http://www.nextlink.com.
On January 10, 2000, NEXTLINK and Concentric Network Corporation announced
an agreement to combine the companies. The transaction is expected to close in
the second quarter of this year. Concentric provides complete Internet business
solutions for small- and medium-sized enterprises, including DSL access, Web
hosting and e-commerce. Concentric also offers data center services, virtual
private networks, dedicated access, and application infrastructure services for
delivering applications over the Internet or a virtual private network.
Level 3 Communications is a communications and information services company
offering a wide selection of IP-based services primarily to Web-centric
companies. The Level 3 Network includes metropolitan networks in 77 U.S. and
international markets connected by an approximately 16,000 mile U.S. intercity
(long-distance) network, an approximately 4,750 mile European intercity network
and both transpacific and transatlantic undersea cables. In July 1998,
INTERNEXT, LLC, beneficially owned by NEXTLINK, signed an agreement calling for
<PAGE>
INTERNEXT to acquire the right to use 24 fibers and certain associated
facilities installed along the entire route of the Level 3 intercity fiber optic
network in the U.S.
# # #
The statements contained in this release that are not historical facts are
"forward-looking statements" (as such term is defined in the Private Securities
Litigation Reform Act of 1995). These statements include those describing
NEXTLINK's plans to offer new services using the planned European network and
the expected timing of the completion and availability of that network, as well
as those describing expectations concerning the timing and scope of the planned
deployment of broadband wireless and other products and services domestically
and internationally, and the timing and potential impact of the Concentric
transaction. Management wishes to caution the reader that these forward-looking
statements are only predictions and are subject to risks and uncertainties and
actual results may differ materially from those indicated in the forward-looking
statements as a result of a number of factors. These factors include, but are
not limited to, the ability of NEXTLINK and Level 3 to negotiate and reach
definitive agreements relating to the purchase of the European network on
satisfactory terms, NEXTLINK's ability to design and construct fiber optic
networks, install cable and facilities, including switching electronics, to
develop, install and provision LMDS equipment and interconnect that equipment
with NEXTLINK's fiber networks and connect the networks, including LMDS
equipment, to customers and on satisfactory terms and conditions, and risks
related to NEXTLINK's national network strategy.
Contacts: NEXTLINK Communications, Inc.
Todd Wolfenbarger / media and industry analysts
703-547-2011 or 703-675-3496 (portable)
Noelle Beams / financial analysts
703-547-2002
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EXHIBIT 99.2
Contact: For NEXTLINK Communications,Inc.
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Todd Wolfenbarger
703-547-2011
Noelle Beams
703-547-2002
For Forstmann Little
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George Sard/Anna Cordasco
Sard Verbinnen & Co.
212-687-8080
FORSTMANN LITTLE TO INVEST ADDITIONAL $400 MILLION IN NEXTLINK
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McLEAN, VA, AND NEW YORK, May 23, 2000 - NEXTLINK Communications Inc.
(Nasdaq: NXLK), one of the world's fastest growing providers of broadband
communications services, and Forstmann Little & Co., a leading private equity
firm, today announced the signing of a commitment letter under which Forstmann
Little will invest an additional $400 million in NEXTLINK to fund the Company's
business plan, to expand the Company's network and services, including its
domestic and international networks, and to introduce new technologies.
Forstmann Little will purchase $400 million of NEXTLINK convertible
preferred stock with a conversion price of $63.25 per share and a 3.75%
dividend. Last January, Forstmann Little invested $850 million in NEXTLINK
convertible preferred stock to expand its networks and services, introduce new
technologies and fund the Company's business plan. With this additional
investment, which is on substantially the same terms as the prior investment,
Forstmann Little's aggregate preferred equity will be convertible into
approximately 10% of NEXTLINK's fully diluted common shares before the pending
business combination of NEXTLINK and Concentric Network Corporation. The
transaction is subject to the parties negotiating and entering into definitive
agreements and customary closing conditions and is expected to be completed by
June 30, 2000.
<PAGE>
NEXTLINK also announced today it has agreed in principle to purchase
multiple European metro fiber optic networks covering more than 80,000 metro
fiber miles, an inter-city Pan European fiber optic network covering more than
88,000 fiber miles and transatlantic fiber-optic capacity for $306 million. This
network expansion will approximately double NEXTLINK's market opportunity and
give it end-to-end network capabilities in the United States, Canada and
throughout much of Europe.
"We're pleased that Forstmann Little has chosen to increase their
investment in NEXTLINK's plan for delivering end-to-end broadband communications
services over our networks around the world," said NEXTLINK Chairman and Chief
Executive Officer Dan Akerson. "Forstmann Little brings a proven record of smart
long-term investing and a reputation as one of Wall Street's platinum investment
firms. NEXTLINK has already benefited significantly from both the firm's
presence on our Board of Directors and their financial commitments."
"NEXTLINK is a terrific company with strong management and excellent growth
prospects," said Nicholas Forstmann, a Forstmann Little general partner and
member of NEXTLINK's Board of Directors. "We are confident that NEXTLINK is well
positioned to take advantage of its many opportunities in both the United States
and in Europe."
NEXTLINK Communications, Inc. provides high quality, broadband
communications services to businesses over fiber optic and broadband wireless
facilities across the United States. NEXTLINK currently provides service in 49
markets. The company is the largest holder of broadband fixed wireless spectrum
in North America, with licenses covering 95 percent of the population in the top
30 markets in the United States. NEXTLINK plans to use wireless capabilities to
complement and extend the reach of its local fiber optic networks in the markets
in which NEXTLINK has spectrum.
Additionally, NEXTLINK has acquired exclusive rights throughout a 384,000
fiber-mile high-speed, IP-centric fiber optic backbone network that will connect
over 50 cities in the United States and Canada. NEXTLINK also has rights to an
empty conduit and additional fibers in this inter-city network. The network is
expected to be finished in 2001, with NEXTLINK turning on segments of the
network during 2000.
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Through this unrivaled collection of facilities, NEXTLINK will provide
integrated, end-to-end telecommunications solutions to its customers in the
United States, Canada and Europe. For more information, visit
http://www.nextlink.com.
On January 10, 2000, NEXTLINK and Concentric Network Corporation announced
an agreement to combine the companies. The transaction is expected to close in
the second quarter of this year. Concentric provides complete Internet business
solutions for small- and medium-sized enterprises, including DSL access, Web
hosting and e-commerce. Concentric also offers data center services, virtual
private networks, dedicated access, and application infrastructure services for
delivering applications over the Internet or a virtual private network.
Since its founding in 1978, Forstmann Little has made 28 acquisitions and
significant equity investments, returning billions of dollars to its investors.
The firm's best-known investments include Gulfstream Aerospace, General
Instrument and Ziff-Davis Publishing. In addition to NEXTLINK, current
investments include McLeodUSA (NASDAQ: MCLD), one of the fastest-growing
integrated communications providers; Intelisys Electronic Commerce, a pioneer in
Internet-based business-to-business procurement solutions; Yankee Candle Company
(NYSE: YCC), the leading maker and marketer of premium candles; Community Health
Systems (NYSE:CYH), a leading rural hospital company; and Capella Education
Company, the for-profit parent company of Capella University, a leading
accredited, Internet-based university.
# # #
The statements contained in this release that are not historical facts are
"forward-looking statements" (as such term is defined in the Private Securities
Litigation Reform Act of 1995). These statements include the timing of the
closing of the Forstmann Little & Co. investment and those describing NEXTLINK's
plans to offer new services using the planned European network and the expected
timing of the completion and availability of that network, as well as those
describing expectations concerning the timing and scope of the planned
deployment of broadband wireless and other products and services domestically
and internationally, and the timing and potential impact of the Concentric
transaction. Management wishes to caution the reader that these forward-looking
statements are only predictions and are subject to risks and uncertainties and
actual results may differ materially from those indicated in the forward-looking
statements as a result of a number of factors. These factors include, but are
not limited to, the ability of NEXTLINK and Forstmann Little & Co. and NEXTLINK
and Level 3, to negotiate and reach definitive agreements relating to the
respective transactions on satisfactory terms, NEXTLINK's ability to design and
construct fiber optic networks, install cable and facilities, including
switching electronics, to develop, install and provision LMDS equipment and
<PAGE>
interconnect that equipment with NEXTLINK's fiber networks and connect the
networks, including LMDS equipment, to customers and on satisfactory terms and
conditions, and risks related to NEXTLINK's national network strategy.
