Prodigy Communications Corp. Thursday made its first large acquisition since it announced it would shelve its Prodigy Classic online service and focus solely on consumer Internet access.
Prodigy purchased Cable & Wireless U.S.A.’s Internet dial-up subscriber service in a deal worth up to $75 million. Prodigy expects to pay between $50 and $75 million in cash for the assets. The final numbers will be determined by how many Cable & Wireless customers remain with Prodigy after the deal goes through.
Denny Matteucci, president and chief executive officer of Cable & Wireless U.S.A., said the move will allow the comany to focus more on building the “next generation Internet network.”
“Increasing our customer base is of key strategic importance to us and with our highly scalable infrastructure, we are easily able to support these customers nationwide without significant capital investment or additions to our existing work force,” said David Trachtenberg, Prodigy president and chief operating officer.
The deal is expected to close by the third quarter.
Prodigy, which launched its IPO three months ago, boasts a subscriber base of more than 736,000
customers. This figure includes 150,000 subscribers to Prodigy de Telmex, Mexico’s largest ISP.