Nov, 2001 : Cable & Wireless Snaps Up Exodus for $850M
📅 - British telecommunications firm Cable & Wireless said today it had purchased "selected assets and a majority of the business activities" of Web hosting firm Exodus Communications for about $850 million (US), including the assumption of about $270 in assumed liabilities.
Exodus filed for Chapter 11 bankruptcy protection in September. According to C&W, the company hosts 46 of the top 150 visited Internet sites, serves approximately 3,500 customers.
Under the agreement, C&W will pick up a substantial portion of the company's business, including 30 of Exodus' 44 data centers: 26 in the U.S., one each in Tokyo and Frankfurt, and two in London. C&W said it expects the agreement to be finalized in Feburary 2002.
"This acquisition meets our key investment criteria of value, strategic fit, strong management and high quality products, service and customer base. We are being selective about which of Exodus' assets we are aiming to acquire - something the Chapter 11 procedure facilitates," said Graham Wallace, C&W CEO.
The purchase marks C&W's second major hosting-related acquisition of the year. In May, the company paid about $340 million for US-based hosting firm Digital Island.
"Combining Cable & Wireless' world class global infrastructure, financial resources and the value added services of Digital Island together with the scale and scope of Exodus' offering and customer base will create a unique offering in managed hosting and interactive web services for enterprise customers," Wallace said.
Cable & Wireless expects "substantial new volumes of traffic" for its network, particularly in the United States. The company believes the economics of its network will help significantly reduce Exodus' network costs, and also expects the creation of opportunities to cross-sell its IP solutions, including Web infrastructure services and content delivery, to Exodus customers. C&W also said it expects to invest up to $250 million in Exodus to bring it up to cash flow break-even. The company anticipates Exodus becoming EBITDA positive by 2003.
Investors didn't have much of a reaction to the announcement Friday morning. Cable & Wireless, which trades on the NYSE in North America, was down 34 cents Friday morning to $14.75.
Exodus filed for Chapter 11 bankruptcy protection in September. According to C&W, the company hosts 46 of the top 150 visited Internet sites, serves approximately 3,500 customers.
Under the agreement, C&W will pick up a substantial portion of the company's business, including 30 of Exodus' 44 data centers: 26 in the U.S., one each in Tokyo and Frankfurt, and two in London. C&W said it expects the agreement to be finalized in Feburary 2002.
"This acquisition meets our key investment criteria of value, strategic fit, strong management and high quality products, service and customer base. We are being selective about which of Exodus' assets we are aiming to acquire - something the Chapter 11 procedure facilitates," said Graham Wallace, C&W CEO.
The purchase marks C&W's second major hosting-related acquisition of the year. In May, the company paid about $340 million for US-based hosting firm Digital Island.
"Combining Cable & Wireless' world class global infrastructure, financial resources and the value added services of Digital Island together with the scale and scope of Exodus' offering and customer base will create a unique offering in managed hosting and interactive web services for enterprise customers," Wallace said.
Cable & Wireless expects "substantial new volumes of traffic" for its network, particularly in the United States. The company believes the economics of its network will help significantly reduce Exodus' network costs, and also expects the creation of opportunities to cross-sell its IP solutions, including Web infrastructure services and content delivery, to Exodus customers. C&W also said it expects to invest up to $250 million in Exodus to bring it up to cash flow break-even. The company anticipates Exodus becoming EBITDA positive by 2003.
Investors didn't have much of a reaction to the announcement Friday morning. Cable & Wireless, which trades on the NYSE in North America, was down 34 cents Friday morning to $14.75.
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URL source: http://www.thewhir.com/marketwatch/cw1130.cfm
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