December 27, 2000, 4:20 PM — NTT COMMUNICATIONS, A subsidiary of Japan's Nippon Telegraph and Telephone, announced Monday an agreement to acquire Web-hosting and Internet service provider Verio for approximately $5.5 billion in cash.
With the acquisition of Verio, NTT Communications aims to further expand the reach of its global network and IP-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 United States, 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 United States.
Under the terms of the agreement, which has been approved by the boards of directors of both companies, the transaction is valued at about $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 make 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 4.
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.