(WEB HOST INDUSTRY REVIEW) — In what could help it create a global network for the delivery of wholesale voice, IP and Ethernet solutions, interconnection services provider Neutral Tandem (www.neutraltandem.com) has entered into an agreement to acquire Tinet SpA (www.tinet.net), an Italian-based, global carrier exclusively committed to the IP Transit and Ethernet wholesale market.
According to Neutral Tandem’s late Thursday announcement, the merger will expand Neutral Tandem’s IP-based network internationally to enable global, end-to-end delivery of wholesale Voice, IP and Ethernet solutions.
“This acquisition redefines Neutral Tandem from a strictly voice interconnection company into a global IP-based network services company focused on delivering global connectivity for a variety of media, including voice, data and video,” Neutral Tandem President and chief executive officer Rian Wren said in a statement. “Furthermore, the integration of Tinet’s global IP backbone will help accelerate and expand Neutral Tandem’s and Tinet’s Ethernet services. This combination will take our Ethernet eXchange service global and will position us for delivering cost-effective wholesale Ethernet interconnectivity solutions end-to-end.”
Under the terms of the agreement, Neutral Tandem will pay cash consideration of approximately 74.5 million euros (approximately $94.9 million), reflecting certain purchase price adjustments, the assumption of approximately 5.2 million euros ($6.6 million) in cash and approximately 18.2 million euros ($23.2 million) in long-term debt, which will be paid off at closing. The acquisition, Neutral Tandem said, will be financed by cash from its balance sheet.
The proposed merger is subject to various standard closing conditions and is expected to close during the fourth quarter of 2010. At that time, Tinet will be a wholly owned subsidiary of Neutral Tandem.
“Tinet is excited to continue to drive the growth of the global wholesale IP Transit and Ethernet markets under the Neutral Tandem umbrella,” Tinet CEO Paolo Susnik stated. “We believe that the combination with Neutral Tandem will provide significant benefits to the global wholesale communications marketplace. The integration of our networks will provide customers greater access points to buy and sell Ethernet services and will add further value to our IP Transit proposition.”
