TIME WARNER TELECOM EXECUTES PURCHASE AGREEMENT FOR GST ASSETS
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TIME WARNER TELECOM INC.
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TIME WARNER TELECOM EXECUTES PURCHASE AGREEMENT FOR GST ASSETS
- - Receives financing commitment for $1.2 billion - -
LITTLETON, Colo. - September 11, 2000 -- Time Warner Telecom Inc. (NASDAQ:
TWTC), a leader in delivering converged communications services to
businesses over its fiber, facilities-based network, today announced it has
executed a purchase agreement to acquire substantially all of the assets of
GST Telecommunications, Inc., and has received commitments for $1.2 billion
of additional financing. The purchase agreement provides for the purchase
of substantially all of the GST assets for cash consideration of $640
million, plus the assumption of certain liabilities and fees, up to a total
purchase price of $690 million. The purchase agreement has been executed
with the closing subject to delivery and satisfaction with disclosure
schedules, obtaining bankruptcy court and regulatory approvals and certain
other customary closing conditions.
The assets Time Warner Telecom will acquire include: over 4,200 miles of
local and regional fiber networks in the Western United States; network
operations center in Vancouver, Washington; SS7 networks; voice and data
switches; and substantially all other assets, excluding customers and
certain assets in Hawaii and certain non-core businesses. By the end of
2001, Time Warner Telecom expects to offer services in 44 markets, as
compared to 22 today, 14 of which are in the top 25 U.S. markets.
"We have earned the reputation as a company that is thoughtful in its
planning and outstanding in its execution," said Larissa Herda, Time Warner
Telecom President and CEO. "This acquisition significantly expands our
footprint into attractive markets in the West with minimal overlap with our
existing operations. Our expertise in managing extensive fiber-optic
networks, and more importantly, selling services that ride over these fiber
optic networks, should allow us to capitalize on GST's solid
infrastructure."
"Within a week of being awarded the assets in the auction, our transition
team was at GST headquarters to begin the integration planning process,"
Herda added. "People are key to any
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successful operation. Since the first time we visited GST, we have been
impressed with their personnel and hope to bring most of them to Time Warner
Telecom."
"Our plans include continued strong growth in our existing markets, and
launching seven additional markets previously announced, between now and
the end of 2001," Herda said. "We also have the bench strength in our
management ranks to grow and expand under our current business plan and to
integrate the GST operations. I commit to our customers and investors that
we will remain focused on our current operations."
Time Warner Telecom has received commitments from its banks to provide $1.2
billion of additional financing for the GST acquisition, capital
expenditures, and general working capital purposes. This includes $525
million of secured financing from The Chase Manhattan Bank and Morgan
Stanley Dean Witter and a $700 million unsecured bridge financing facility
from Morgan Stanley Dean Witter, Lehman Brothers Inc. and The Chase
Manhattan Bank.
"Our expansion plans, including the GST acquisition and expansion of its
fiber networks, will be fully funded with this financing commitment,
operating cash flow and cash on hand," said David Rayner, Time Warner
Telecom's Sr. Vice President and CFO.
"This acquisition allows Time Warner Telecom to significantly accelerate
our growth plans," Rayner added. "These assets, along with our plans to
expand them, will allow us to increase our revenues. By 2003, we expect the
GST markets will generate approximately 25 percent of our consolidated
revenue. At the same time, we expect EBITDA to continue to grow."
A presentation with additional information is available on the company's
web site: www.twtelecom.com.
About Time Warner Telecom Inc.
Time Warner Telecom Inc., headquartered in Littleton, Colo., builds local
and regional optical networks and delivers "last-mile" broadband data,
Internet access and voice for businesses. The company currently serves
customers in 22 U.S. metropolitan areas including: Austin, Dallas, Houston
and San Antonio, Texas; Charlotte, Fayetteville, Greensboro and Raleigh,
N.C.; Albany, Binghamton, New York City and Rochester, N.Y.; Northern New
Jersey; Cincinnati and Columbus, Ohio; Memphis, Tenn.; Orlando and Tampa,
Fla.; Indianapolis, Ind.; Milwaukee, Wisc.; San Diego, Calif.; and
Honolulu, Hawaii. Time Warner Telecom plans to activate its networks in the
Los Angeles/Orange County, Calif. and Dayton, Ohio markets later this year.
The company will begin offering service in Denver, Chicago, Atlanta,
Minneapolis and Columbia, S.C. in mid-2001. Please visit www.twtelecom.com
for more information.
This press release includes Forward-Looking Statements (as defined in the
Private Securities Litigation Reform Act of 1995) regarding the company's
growth and prospects. The accuracy of these statements is subject to a
number of business, market and other factors beyond the company's control,
including those stated above and as periodically described in our SEC
filings, and actual results may be materially different than such
statements suggest. For further information, investors are referred to the
section entitled Forward-Looking Statements of the company's most recent
Form 10-K, 10-Q and other filings, which statements, to the extent
applicable, are incorporated into this press release.
