Mar 22nd 2000: PSiNET today bought IT services business Metamor Worldwide for $1.9bn in stock.

The acquisition of the international e-commerce solutions provider will be a catalyst for PSiNET to build out a global infrastructure to provide web design services, managed Web hosting and applications outsourcing.

The deal marks the Internet access and hosting provider's first endeavor into the application service provider marketplace. Given PSiNET's aggressive growth by acquisition into the global Web hosting arena, the Metamor buyout may be the first of many deals to come.

"This deal is a real no-brainer," said William Schrader, PSiNET chairman and chief executive officer. "The acquisition of Metamor Worldwide furthers our plans to move into the applications outsourcing arena."

The acquisition also gives PSiNET a controlling interest in Metamor's publicly traded e-commerce subsidiary Xpedior Inc. Xpedior provides comprehensive e-business solutions worldwide for Fortune 1000 companies and government institutions and will work to supply PSiNET's 90,000 worldwide clients with legacy integration and Web development services.

Xpedior remains an independent business entity with PSiNET taking-up two board member seats through its 80 percent stock ownership of the firm.

Metamor has clients ranging from Fortune 1000 to middle market businesses. It offers high-speed services including e-commerce solutions, package software implementation and integration, custom application development and application outsourcing, as well as Web hosting and network integration.

PSiNET expects Metamor to reap the benefits of cross-selling its services with existing clients. Over the next three years PSiNET projects that Metamor should produce about $500 million in sales.

The deal also provides PSiNET with an expert staff to crack into ASP and integration services. When compared to rival hosting provider Exodus Communication's 450 worldwide IT specialists, PSiNET gains numeric superiority by acquiring 5,400 experts worldwide.

Recent weeks have seen a developing trend towards hosting companies acquiring integration skills. Earlier this month, leading ASP Interliant, which was formed from a merger with hosting provider Sage Networks last year, bought two Peoplesoft integrators. A week before, hosting provider Verio and IT services business Ciber launched Agilera, a joint venture ASP spin-off based on Ciber's application outsourcing division. (See related stories, Exchange to get ASP makeover and Verio-Ciber venture strides out).

The latest transaction is structured as a tax-free reorganization consisting of just under 40 million shares of PSiNET common stock. Each share of Metamor will be exchanged for .9 shares of PSiNET common stock.

The transaction, subject to shareholder and regulatory approvals, is scheduled for completion by the middle of the year.

Report by Patricia Fusco, InternetNews.com

ASPnews.com

ASP news    publications    forum    about us    directory

internet.com

Internet News  Internet Stocks/VC  Internet Technology  Windows Internet Tech.  Linux/Open Source  Web Developer  E-Commerce/Marketing  ISP Resources  Downloads  Internet Resources  Internet Lists  International Search internet.com  Advertising Info  Corporate Info  Internet Trade Shows

internet.commerce

Be a Commerce Partner  Software Store  Computer Help  Register Domains  Internet Jobs  Map Your Website  Rent E-mail Lists  Bookstore  Press Release dist.  Internet Research  Venture Capital  Web Publishing  Build Your Intranet  Ask an Expert  Get e-Biz Intell.  Content for Websites  Income for Small Biz  Address Verification  Build Sticky eStores  Advertise a Coupon  Promotional Products  Accept Credit Cards  Download Solutions  Create a Web Store  fax & vmail for free  Hardware Store  Track Time & Expenses  News to Your Desktop  Small Biz Purchasing  B2B Directory/Search  Freelancers

Copyright © 2000 internet.com Corporation All Rights Reserved. Legal Notices.