Corio Inc. is to buy all of the ASP (application service provider) assets of Qwest Communications International Inc. subsidiary Qwest CyberSolutions LLC (QCS) for US$15 million in cash, the companies announced last Thursday. QCS customers will be transferred to Corio, but will continue to be served through Qwest's CyberCenters or data centers, the companies said in a statement.
Corio, of San Carlos, California, is also buying network services from QCS including data center services, dedicated Internet access and storage solutions, the statement said.
Corio sees the move as a way to "accelerate its path to profitability," Chief Executive Officer George Kadifa said in a conference call Friday.
The purchase is "an excellent way to leverage our cash position," as it will significantly increase the company's revenue, he said.
"Corio is currently not profitable, and we hope this purchase will reduce our loss significantly," Chief Financial Officer Barbara Posch said during the call.
No debt has been assumed with the purchase, she said.
The acquisition is likely to be completed in September, Kadifa said.
The company said it had not yet determined how many employees will be transferred from QCS, but said details will be released once the deal is complete.
Corio gives customers access to applications from vendors including PeopleSoft Inc., Oracle Corp., SAP AG and Siebel Systems Inc. for a fixed monthly fee.