Alaska Communications Systems in agreement to acquire Crest Communications Corporation

Telecomworldwire, April 3, 2008

TELECOMWORLDWIRE-3 April 2008-Alaska Communications Systems in agreement to acquire Crest Communications Corporation(C)1994-2008 M2 COMMUNICATIONS LTD http://www.m2.com

Alaska Communications Systems Group Inc (ACS) (Nasdaq:ALSK), a provider of broadband and other wireline and wireless solutions in Alaska, on Wednesday (2 April) announced that the company has entered into an agreement to purchase Crest Communications Corporation , the owner and operator of the North Star submarine fibre-optic cable, one of three existing submarine fibres connecting Alaska to the continental US.

The acquisition cost is approximately USD70m in cash, free of debt.

Crest's system includes an undersea fibre system of approximately 1,900 miles with cable landing facilities in Whittier, Juneau and Valdez, Alaska and Nedonna Beach, Oregon. The system also includes terrestrial transport components linking Nedonna Beach, Oregon to a Network Operations Control Centre in Hillsboro, Oregon and collocation facilities in Portland, Oregon and Seattle, Washington in US.

The company expects the acquisition to provide it with a new source of cash flows, including USD11m in annual recurring revenue; an EBITDA contribution from recurring revenue of USD3m annually; and additional non-recurring IRU sales that have averaged approximately USD9m per annum.

ACS will reportedly fund a substantial portion of the purchase price from cash on hand, cash flow from operations and by drawing up to USD20m on its existing revolving credit facility.

The transaction is expected to close in the second half of 2008, subject to various closing conditions, as well as federal and state regulatory approval.

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