XO Communications completes Allegiance acquisition

By Jeff Pines

Washington, June 23 - XO Communications said it completed its acquisition of Allegiance Telecom, Inc.'s telecom assets.

XO paid $322 million in cash and 45.4 million XO common shares for the assets.

The acquisition of Allegiance Telecom significantly expands XO's local market coverage across the country, allowing XO to serve an even greater number of business customers with voice, data and internet services. XO's network will now have more than 900 local Points of Presence, the company said.

The expansion will increase XO's presence in Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco and Washington, D.C., it said.

XO continues to expect to be able to achieve over time approximately $160 million in annual synergies as a result of the acquisition.

"The improvements are expected to reduce our costs and expedite XO's path to profitability," said Wayne Rehberger, chief operating officer of XO Communications in a news release. "We have already initiated a number of network, operational and systems integration initiatives."

Dallas-based Allegiance, which was a facilities-based local exchange carrier, filed for bankruptcy on May 14. Its Chapter 11 case number is 03-13057.

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