RealTime IT News

MetroNet Acquires Controlling Interest in Netcom Canada

MetroNet Communications Corp., in a joint venture with Providence Equity Partners, has inked an agreement to acquire a controlling interest in Netcom Canada from ICG Communications for $25.5 million in cash and stock.

Netcom Canada is one of Canada's five largest Internet service providers. Its ISP backbone networks about 40 points of presence (POPs) in more than 40 cities nationwide.

Under the terms of the agreement, MetroNet will have a 51 percent ownership stake in the venture, as well as a path to control, for which it will pay $20.5 million in cash and $5.0 million in stock.

The acquisition will immediately add a significant Internet division to MetroNet's already very successful data networking services capabilities.

"The Internet opportunity in Canada is ready to explode and it is over and above the $10 billion Canadian business local and long distance telecom opportunity," said D. Craig Young, MetroNet president and CEO.

"This acquisition is an excellent strategic fit and both our companies share the same view of where this quickly changing industry is going and the critical role that data networking services, electronic commerce, and the Internet will play."

With 35 percent of Canada's GDP generated by exports, and 80 percent of those exports going to the United States, MetroNet is uniquely positioned to thrive with its cross-border, local access, and intercity fiber optic facilities as the world moves to electronic commerce.