Shares of Neutral Tandem Inc. stayed flat in after-hours trading on the interconnection services providers announcement that its buying Tinet SpA, an Italy-based carrier that specializes in wholesale IP transit and Ethernet. Neutral Tandem intends to expand its focus from strictly interconnection,” as Rian Wren, president and CEO of Neutral Tandem put it, to connectivity for a variety of media, including voice, data and video.”
The announcement comes about a month after Neutral Tandem reported disappointing quarterly earnings, with net income down 21 percent.
Chicago-headquartered Neutral Tandem will pay about $94.9 million for Tinet; itll also assume $23.2 million in long-term debt and pay that off at closing. The acquisition, to be paid for in cash, should wrap up in the fourth quarter. Tinet then will become a wholly owned subsidiary of Neutral Tandem. Neutral Tandem expects the deal to immediately benefit its earnings-per-share value for the year.
The integration of Tinet’s global IP backbone will help accelerate and expand Neutral Tandem’s and Tinet’s Ethernet services,” Wren added. This combination will take our Ethernet eXchange service global and will position us for delivering cost-effective wholesale Ethernet interconnectivity.”
Neutral Tandem stock remained at $10.96 in late-evening activity.