Level 3 ( LVLT) is getting out of the software-resale racket. The Broomfield, Colo.-based telco agreed Thursday to sell its software arm to Insight Enterprises ( NSIT) for $287 million in cash. "Level 3's communications business is presenting numerous investment and growth opportunities," said vice chairman Charles Miller III. "The proceeds from the sale of Software Spectrum will increase Level 3's ability to pursue those opportunities that are more central to our communications business." Software Spectrum was always a bit of a
strange fit for Level 3. But the telecom wholesaler got into the software business back in 2002 to help lift top-line numbers and steer clear of a possible default with lenders. Level 3 said last year it would try to pursue an IPO of the unit. Just before it made that announcement, Level 3 substituted its telecom business as collateral for a $730 million loan from Merrill Lynch. Previously, the software unit was the business asset Merrill Lynch had secured as collateral. Level 3 said the Insight deal is expected to close in the third quarter. Late Thursday, Insight rose 41 cents to $18.92 and Level 3 rose 6 cents to $4.20.