Interoute Communications Ltd., the privately held owner and operator of the i-21 voice and data network in Europe, plans to buy VIA NET.WORKS Inc. for $18.1 million.
VIA provides communication technologies to small and medium enterprises in Europe and the United States.
Interoute is looking to VIA for its PSINet Europe operations in Germany, France, Belgium, Switzerland and The Netherlands, and its VIA NET.WORKS operations in Spain, France and Germany. PSINet Europe offers subscribers IT outsourcing, dedicated hosting, security, data centers and more. VIA provides virtual private networks, managed security, shared and dedicated hosting, DSL, leased lines, dialup and more.
Given the difficult financial circumstances we have endured over the last nine months, this transaction provides us with the opportunity to make all our creditors whole, and place our business and employees in the hands of a credible and financially strong industry player, says Ray Walsh, VIAs CEO.
The sale also includes some assets and liabilities pertaining to VIA’s back-office financial, network management and technical support systems, the companies say. VIA will remain responsible for its corporate headquarters staff, other than the employees offered jobs by Interoute, as well as all liabilities and expenses of the group parent. The sale is subject to approval by VIA’s shareholders.
In addition to the $18.1 million, Interoute also intends to provide a bridge loan facility VIA NET.WORKS Inc. of up to $7.2 million through the close of the transaction. Interoute says $2.2 million will be used to fund VIA’s subsidiary company operations, and $5 million will go toward VIA funds that will pay the corporate operating costs and certain accrued liabilities. At closing, the purchase price of the transaction would be reduced by the amount that VIA has drawn on the $5 million facility.
VIA also will use $1.9 million of the funds it receives for Interoute’s stock investment to pay off creditors.
The acquisition is subject to closing conditions, but if all goes as planned, the deal will close in early November, Interoute says.