Verio, which hosts 400,000 mostly small and medium-sized corporate Web sites in the U.S., got big by swallowing up local and regional Web-hosting and development companies. Now the Japanese telecom company NTT Communications is acquiring the acquirer, buying Verio for $5.5 billion in cash. The tab represents a steep premium on Verio's share price, which jumped 62 percent Monday on the news.
The New York Times explained why, in an era when most Internet deals are consummated in stock, this one was done in cash. The Japanese government - which only recently deregulated telecommunications - still imposes restrictions on the sale of NTT stock.
Writing for the Wall Street Journal, Robert A. Guth and Peter Landers reported Standard & Poor's warning that the deal might downgrade NTT's credit because of the bump the Verio deal would cause in the company's borrowing.
Interactive Week's Max Smetannikov must have had his ear close to Verio. His coverage stood alone in noting that the deal followed several weeks of rumors. Smetannikov had a Verio VP confirming that the company had been approached by other unnamed suitors - another detail the other outlets didn't mention.
The Journal bundled its Verio coverage with news of the international moves of NTT DoCoMo, the mobile sister company of NTT Communications. DoCoMo is buying 15 percent of the Dutch carrier KPN Mobile for $4.5 billion. Yahoo ran a Reuters story by Karen Iley that dissected the DoCoMo-KPN deal in the context of the fast-consolidating European wireless market. Iley said KPN's stock price dropped on disappointment that a proposed deal with Spain's Telefonica had fallen through. In this light the DoCoMo deal looks like a rebound. - Keith Dawson
NTT to Purchase Verio for $5.5 Billion
The Industry Standard
NTT Communications to Buy Verio
New York Times
Verio Acquisition Gives NTT a Global Presence
Wall Street Journal
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NTT Buys Verio for $5.5 Billion
Japan's NTT Buys Verio for $5.5 Billion
Japan's NTT Buying ISP Verio (AP)
1-KPN Tumbles as NTT DoCoMo Deal Disappoints (Reuters)