RealTime IT News

Japan's NTT Buys Verio For $5.5 Billion

Japan's NTT Communications Corp. Monday bought the largest Web hosting firm in the U.S. by purchasing the remaining stake of Verio Inc. that it does not already own for about $5.5 billion.

Tokyo-based NTT Communications, a subsidiary of Nippon Telegraph and Telephone Corp. (NTT), said it would acquire Verio (VRIO) for $60 per common share.

NTT Communications has been expanding its global network services and IP-based services. Primarily focusing on Asia, NTT Communications is focused on meeting the growing demand for corporate data communications services over the Internet.

The Verio deal marks NTT's largest investment to date and the first full acquisition for the Japanese giant, which is a relatively late entrant into the global telecommunications market.

Masanobu Suzuki, NTT Communications president and chief executive officer, said the proposed acquisition of Verio is an important step for NTT Communications global Internet strategy.

"In the arena of global business, we have been focusing on expanding network services globally and providing them through IP networks," Suzuki said.

"Another pivotal point is to have business footholds in Asia. The proposed acquisition of Verio gives an important leverage for expanding our global business in the U.S."

Together, NTT Communications and Verio would have the ability to meet the needs of customers of all sizes, from the largest multinational corporations to the newest Web-centric start-ups, throughout the Pan Pacific region and the U.S.

Suzuki said NTT Communications expects the successful acquisition of Verio to provide a basis for the global expansion of its services.

"By combining the IP networks and services of the two companies, we will be able to offer one-network IP solutions under a single-policy operating structure," Suzuki said.

"These include having the ability to transmit mission-critical data across the two networks and to furnish a uniform level of quality and services."

Justin L. Jaschke, Verio founder, director, and chief executive officer said the company believes that the agreement represents an excellent value for its shareholders and an exciting future for its all aspects of its business.

"We believe that this agreement represents an excellent value for our shareholders and an exciting future for our customers, employees and sales channel partners," Jaschke said. "This transaction brings together two of the world's leading Internet companies to form an even stronger global IP competitor."

Verio was an appealing company to NTT Communications as a market-leading U.S. Web hosting firm providing a comprehensive portfolio of Internet services. Verio currently hosts more than 400,000 Web sites, specifically targeting small- and medium-sized businesses.

Verio also operates a Tier One Internet backbone network in the U.S. NTT Communications operates an established IP network in Asia. The proposed combination will enable NTT Communications and Verio to provide both IP network services and advanced Web-based business solutions.

Jaschke said the combination of Verio and NTT Communications further enhances its ability to meet the expanding needs of companies and to accelerate the growth of its business services in the U.S. and around the world.

"With our world-leading hosting platforms, Tier One network and strong global distribution, we expect to play a key role in the development of NTT Communications' international business," Jaschke said.

NTT Communication's Suzuki said the two firms worked well together