Interconnection services provider Neutral Tandem (Nasdaq: TNDM) has struck a deal to acquire Tinet SpA, an Italian-based IP Transit and Ethernet wholesale carrier.
Under the terms of the agreement, Neutral Tandem will pay about $94.9 million in cash, and assume about $6.6 million in cash and about $23.2 million debt that it said will be paid when the deal closes. Expected to close in Q4, Tinet will become a wholly owned subsidiary of Neutral Tandem.
By acquiring Tinet, Neutral Tandem instantly gains an international network presence for its wholesale voice, IP and Ethernet services.
A key piece of gaining this global presence will be Ethernet. In February, Neutral Tandem decided to launch its own Ethernet neutral interexchange point to help service providers a streamlined process to interconnect their Ethernet offerings in order to service customers with multiple locations that may or may not be in that particular carrier's footprint. Having international presence could give Neutral Tandem an additional revenue source as service providers look to expand their international Ethernet presence for their multinational corporation (MNC) customers.
Rian Wren, President and CEO of Neutral Tandem, said "the integration of Tinet's global IP backbone will help accelerate and expand Neutral Tandem's and Tinet's Ethernet services' and "will take our Ethernet eXchange service global and will position us for delivering cost-effective wholesale Ethernet interconnectivity solutions end-to-end."
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