This week we've heard about how Level 3 CEO Jeff Storey told investors at a Deutsche Bank event what they already knew even if they weren't aware of it. That's the simple fact that M&A is an option but not a necessity for Level 3's success anymore.
Investors may look at that in the light of slower dealmaking in the sector, but it's really something a healthy company should always be able to say. The fact that this was news reminds us there was a time not so long ago when it definitely wasn't the case for Level 3, a time when the adjective 'crushing' was indeed properly used to describe the company's debt load and no reasonable organic growth rate was going to fix it.
All the M&A they pursued and integrations they suffered through managed to finally get all the wheels on the bus back on the ground after more than a decade of stunt driving. Now it's time to prove they know how to drive the kids to soccer practice, run the errands, and parallel park like everyone else.
On my recent trip to Metro Connect and Telecom Exchange West I also had the opportunity to sit down and chat with Jeff Storey for a bit. He seems quite ready to keep those wheels firmly on the ground, and I think that for the new Level 3 he has been building to make any really big inorganic move in the near future the opportunity will have to be quite irresistible. Acquisitive perhaps, but with airbags and anti-lock brakes instead of crash helmets.
So back to organic growth, where the proof will hopefully be in the pudding over the next few years. In addition to the federal deal earlier this week, Level 3 has announced two multinational corporate contract wins in the last 36 or so hours. Frankfurt-based, logistics automation specialist Dematic has tapped them for a global VPN solution spanning 15 sites across three continents. And the movie giant Cinemark's Brazil division is using their IP connectivity for its 64-theater VPN network. Both seem fairly representative of the kind of enterprise deals they're going after. All we need now is lots more of them.
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