PSINet Nabs E-Commerce Firm for $1.9 Billion
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The transaction is structured as a tax-free reorganization consisting of just under 40 million shares of PSINet common stock. Each share of Metamor will be exchanged for .9 shares of PSINet common stock.
PSINet (PSIX) plans to utilize the acquisition as a catalyst to construct a global business infrastructure equipped to provide web design services, managed Web hosting and applications outsourcing.
The deal also gives PSINet a controlling interest in Metamor's (MMWW) publicly traded e-commerce subsidiary Xpedior Inc. Xpedior (XPDR) provides comprehensive e-business solutions worldwide for Fortune 1000 companies and government institutions.
"E-commerce is an important component of our Internet strategy," Schrader said. "We purchased Transaction Network Services Inc. last year to broaden our offerings and services in that area. The acquisition of Metamor Worldwide furthers our plans to move into the applications outsourcing arena."
Peter T. Dameris, Metamor chairman, president and chief executive officer, said joining forces with PSINet significantly broadens Metamor's ability to deliver value to clients.
"With the added strength of PSINet's infrastructure and hosting capabilities, Metamor expands our e-business, application development and software package service offerings to truly deliver end-to-end solutions," Dameris said.
Houston-based Metamor posted 1999 revenues of $577 million and has more than 70 offices, with over 4,500 employees worldwide. Subsidiary Xpedior, headquartered in Chicago, has approximately 1,300 employees.
Schrader said that the acquisition also netted a gifted group of IT consultants and Web professionals posed to expand PSINet's global services.
"Metamor's services provide an excellent complement to our global hosting capabilities and they bring us a talented and formidable team of consulting professionals that can help with new and existing clients worldwide," Schrader said.
Completion of the transaction is subject to shareholder and regulatory approvals. The transaction is scheduled for completion by the middle of the year.