CORVIS CORP (CORV) 8-K
ITEM 2 - ACQUISITION OF ASSETS
On June 13, 2003, Corvis Corporation announced that C III Communications, L.L.C., a joint venture between Corvis and Cequel III, a St. Louis-based telecommunications and cable management firm, closed on the purchase of the assets of Broadwing Communications Services, Inc., subject to certain remaining state and local regulatory requirements. C III Communications also assumed $312.7 million in certain long and short term operating commitments of Broadwing Communications. Corvis will initially retain a 96% ownership interest in C III Communications, Cequel III will initially retain a 1% ownership interest, and Broadwing, Inc., the parent company of Broadwing Communications Services, will initially retain a 3% equity interest.
The agreement to purchase most of the assets of Broadwing Communications was announced in February 2003. In accordance with the terms of the Asset Purchase Agreement, the originally announced network purchase price of $129.0 million was reduced to approximately $90.6 million. In addition, C III Communications purchased net working capital of approximately $17.0 million for which payment, with interest, will be deferred for one year. The purchase price may be subject to certain further adjustments. The terms of the acquisition were the results of arms-length negotiations between C III Communications and Broadwing, Inc. Funding for the purchase was obtained by C III Communications from cash on hand, of which $90.6 million was contributed to C III Communications by Corvis from its cash on hand. Corvis has also agreed to contribute an additional $50.0 million to C III Communications by December 31, 2003 to fund ongoing operating expenses.
Broadwing Communications is a current customer of Corvis, accounting for $8.7 million of Corvis' revenue in 2002 and $0.3 million in the first quarter of 2003. Except as described in the previous sentence, neither Broadwing, Inc. nor Broadwing Communications had a material relationship with Corvis or any of its affiliates, Corvis' directors or officers or any associates of any of such directors or officers.
The foregoing description is not necessarily complete and is qualified in its entirety by reference to the Asset Purchase Agreement and Amendment No. 1 to the Asset Purchase Agreement, which are attached hereto as Exhibits 2.1 and 2.2 and incorporated herein by reference.
The assets acquired by C III Communications include 18,700 recently completed route miles of the latest generation of fiber optic cables; switches and amplifiers; a state-of-the-art network operations center; and all the other network elements necessary to provide state-of-the-art integrated and managed broadband telecommunications services. Through these assets, Broadwing Communications provides managed network solutions and broadband telecommunications services to more than 1,000 corporate customers in 137 of the top 150 markets in the United States; broadband transportation services to major telecommunications carriers; and long-distance telecommunications services to more than 150,000 customers. C III Communications has now changed its name to Broadwing Communications, LLC and intends to
continue to use the acquired assets in a manner substantially similar to the manner in which they were used prior to the acquisition.
ITEM 7 - FINANCIAL STATEMENTS AND EXHIBITS
The following documents are filed as part of this report:
(a) Financial Statements of Business Acquired
The required audited financial statements for the acquired assets are not yet available. Corvis expects to file such financial statements within 75 days of the date of the acquisition, in accordance with the rules of the Securities and Exchange Commission.
(b) Pro Forma Financial Information
The required pro forma combined financial statements are not yet available. Corvis expects to file such financial statements within 75 days of the date of the acquisition, in accordance with the rules of the Securities and Exchange Commission.
(c) Exhibits
A list of exhibits filed herewith or incorporated by reference herein is contained on the Exhibit Index immediately preceding such exhibits, and is incorporated herein by reference. |
