Cable & Wireless To Acquire Exodus

Cable & Wireless announced Friday that it will acquire most of the assets of Exodus Communications in an all-cash transaction of $575 million. Cable & Wireless will also assume approximately $180 million in Exodus debt.

The London-based telecommunications giant will acquire Exoduss American, Japanese and European customer contracts, and other assets, including 26 data centers in the US, 2 in London and one each in Tokyo and Frankfurt.

The acquisition fits Cable & Wireless strategy to provide Internet Protocol and data services to business customers in the US, Europe and Japan. Earlier this year Cable & Wireless acquired the assets of another struggling Web-hosting company, Digital Island, for $340 million.

Exodus had filed for bankruptcy in September, after its customer acquisition momentum ground to a halt amidst a downturn in the telecommunications and dot-com sectors.

The deal is subject to approval of the federal bankruptcy court in Wilmington, Delaware, where Exodus Chapter 11 case is pending.

Cable & Wireless expects that with an additional investment of $250 million it can make Exodus EBITDA positive during calendar 2003 and see it to contribute positively to C&Ws earnings per share and cash flow in the financial year ending March 31, 2005.