Global Crossing Finalizes GlobalCenter Sale
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Global Crossing Ltd. Wednesday cemented the sale of its GlobalCenter Web hosting subsidiary -- first announced in September -- to Exodus Communications, with the added sweetener that Exodus will pick up at least 50 percent of all its future network capacity needs from Global Crossing.
The consummation of the deal comes a little more than a week after the Bermuda-based fiber optic network builder reshuffled its management structure in response to a less-than-stellar year.
Under the terms of the agreement, Global Crossing received 108.2 million shares of Exodus common stock, representing a 20 percent equity interest in that company. Additionally, Tom Casey, Global Crossing's chief executive officer, will take a seat on Exodus' board of directors.
As part of the deal, Exodus signed a 10-year network services agreement which commits the company to purchasing at least 50 percent of its future network capacity needs outside of Asia from Global Crossing. Also, the two companies gave the nod to a long-term global marketing services agreement under which Global Crossing will offer and co-brand Exodus' Web hosting services to its customers.
"The Exodus/GlobalCenter combination creates a Web hosting leader of unparalleled scale, scope and global reach," Casey said. "Exodus' commitment to use Global Crossing as its primary network provider worldwide will provide Global Crossing with a major long-term revenue source that we believe will generate at least $4 to $5 billion in revenues over the next decade. In addition, under our joint marketing agreement, Global Crossing will now be able to offer our customers Exodus' significantly advanced portfolio of mission-critical complex Web hosting services along with our own sophisticated data and IP service offerings."
To further cement the new fraternal relationship. Exodus and Asia Global Crossing teamed for a joint venture providing complex Web hosting and managed services in Asia. Exodus holds 67 percent of the venture while Asia Global Crossing owns 33 percent. Both companies intend to contribute all their Asian Web hosting assets to the joint venture, with Asia Global Crossing serving as its primary network provider, supplying at least 67 percent of the venture's networking needs.