Genuity Bids $106 Million for Integra

Putting its sizable market capitalization to work, Genuity, a Woburn, Mass., network services giant, has offered to buy Integra, a Paris Web and application host, for $106 million in stock.

Under terms of the deal, which has been endorsed by directors of both companies, Integra investors will receive 0.75 Genuity shares for each share of Integra they hold. The price represents a 14 percent premium on Integra stock, which is traded on public markets in France and Germany.

"(The acquisition) will enhance Genuity's organic growth plan and dramatically accelerate our expansion into Europe," said Paul R. Gudonis, Genuity's chairman and CEO. "It will eliminate the need for Genuity to build out additional European data centers, thereby significantly reducing capital costs,"

Earlier this year, Genuity said it would spend up to $9 billion to deploy Web hosting service on the continent.

Integra will be merged into Genuity's European operations and rebranded as Genuity Europe. Integra has operations in Denmark, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden, and the United Kingdom.

"This agreement to combine with a preeminent global player allows us to better serve our European-based customers globally from day one," said Andy McLeod, Integra's CEO.

Integra has been in need of a partner with deep pockets to help it gain a critical mass of customers. In 2000, the 5-year-old company reported a operating loss of $42 million or revenue of $43 million. Recent quarterly figures show improvements, especially in Web hosting, but the company still needed a capital infusion.

Genuity started out as BBN, later BBN Planet, and was involved in Arpanet, the Internet's predecessor. It was one of the first network infrastructure companies to build a Tier 1 network. Upon completion of the Integra deal, Genuity will have operations in 19 countries and more than 5,400 employees.


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