STOCKHOLM (05/08/2000) - NTT Communications Corp., a subsidiary of Japan's Nippon Telegraph and Telephone Corp. (NTT), announced today an agreement to acquire Web-hosting and Internet services provider Verio Inc. for approximately US$5.5 billion in cash.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, the transaction is valued at around $5.5 billion, excluding the Japanese company's current 10 percent stake in Verio, valued at approximately $500 million, NTT Communications said.
The Tokyo-based company said in a statement that a U.S.-based subsidiary will kick off a tender offer no later than May 17 for all outstanding shares of Verio at $60 per share of the Englewood, Colorado-based company's common stock.
NTT's offer marks a significant premium over the $35.94 closing price of Verio shares at the end of trading on the Nasdaq exchange May 5.
The transaction is expected to close in the third quarter, subject to customary terms and conditions, including that NTT Communications acquires Verio shares amounting at least to a majority holding in the U.S. company, according to the statement.
With the acquisition of Verio, NTT Communications aims to further expand the reach of its global network and IP (Internet protocol)-based services, which are primarily focused on Asia, the company said.
Verio currently hosts more than 400,000 Web sites and also operates an Internet backbone in the U.S., the statement said. By combining Verio's operations with NTT Communications' existing IP-based network, the Japanese company said it will be able to meet the needs of corporate customers, from small businesses to major enterprises, throughout the pan-Pacific region and the U.S.
NTT Communications, in Tokyo, can be reached via the Web at http://www.ntt.com/index-e.html. Verio, in Englewood, Colorado, is at http://www.verio.com/.