BT to Acquire Infonet for $965m

BT agreed to acquire Infonet, a provider of international managed voice and data network services, for $965 million (excluding Infonet's net cash balance of $390 million, the aggregate value of the deal is $575 million). Infonet, which is based in El Segundo, California, has local operations in 70 countries and claims 1,800 multinational customers -- including Siemens, Nokia, Bayer AG International, IBM and Hilton International. IInfonet reported revenue in 2003/04 of $620 million and expects to be cash flow positive by the end of the current financial year. The acquisition price represents a premium of 23% to the average price per Infonet share over the past three months.



BT said it expects to see significant benefits from the combination of the product sets and customer bases of the two companies. BT intends to combine the two companies' transport networks rapidly and to rationalize their local assets where possible.



Simultaneous with the acquisition of Infonet, BT will enter into a strategic relationship with KDDI (a major distributor of Infonet services) to address network-centric outsourcing opportunities for BT customers in Japan, and also for KDDI customers outside Japan. http://www.btplc.com/http://www.infonet.com/

• Infonet's "World Network" includes almost one million kilometres of directly managed circuits and trunks, including 720,000 kilometres of fiber-based circuits.



• Infonet Services Corporation (NYSE:IN) was established in 1970 and completed its initial public offering in December 1999.