360networks strikes up a broadband buy
The wholesale provider of bandwidth agrees to acquire broadband networking company NetRail for an undisclosed amount in stock.
NetRail, a privately held Atlanta-based wholesaler, has agreements with most of the major Internet backbone network companies that allow NetRail to link directly with the public Internet backbone system. For 360networks, which carries Internet and voice traffic for other communications carriers, these agreements are valuable because they will allow the company to shuttle traffic between various networks without having to enter into lengthy negotiations for its own peering agreements. Peering agreements are the arrangements between communications carriers that allow them to route traffic over each other's networks.
The deal is intended to help 360networks in its efforts to expand globally. Several communications companies such as 360networks are building vast global fiber-optic networks and are racing to serve major businesses and other carriers worldwide.
The company already has completed about 85 percent of its construction on a 26,700-mile North American network and a 7,300-mile undersea Atlantic network. 360networks also will gain access to NetRail's 20,000 miles of leased fiber-optic cables and dozens of switching facilities that house Internet equipment. 360networks was interested in gaining network engineers from NetRail, which employs about 130 workers, according to the company.
The proposed acquisition, which must be approved by NetRail shareholders and regulators, is expected to be final during the second calendar quarter.
360networks, which counts Deutsche Telekom, France Telecom, Shaw Communications, PSINet, IMPSAT and others, as its customers, is building networks in Europe, South America, Asia and elsewhere around the Pacific Rim.
Stock in 360networks has traded as high as $24.19 and as low as $10 in the past year. 360networks will report its fourth-quarter and 2000 year-end results Feb. 28.