Cable and Wireless Completes Exodus Acquisition

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Cable and Wireless and its Digital Island subsidiary Friday said they have completed the acquisition of hosting provider Exodus Communications in a deal valued at $750 million.

The acquisition, which includes 26 data centers and substantially all of Exodus' U.S. customer contracts, was approved Jan. 17 by the U.S. Bankruptcy court.

Negotiations for Cable and Wireless to acquire several of Exodus' international data centers are still pending.

As of December, Exodus had 3,200 customers, according to a Cable and Wireless statement.

Exodus CFO Bill Austin will become CEO of the new division, which will combine the hosting business from Exodus, Digital Island and Cable and Wireless, the statement said. He will report to Don Reed, CEO of Cable and Wireless Global.

William Krause, chairman and CEO of Exodus, will act as an adviser to Cable and Wireless CEO Graham Wallace throughout the transition, which is expected to take about a month-and-a-half, an Exodus spokeswoman said.

Krause will remain chairman of the Exodus estate, which includes the remainder of its 44 data centers and other assets not purchased by Cable and Wireless, she said.

The division, which has an $800 million current annualized run rate, will brand services sold in the United States as "Exodus, a Service of Cable and Wireless." Elsewhere, the services will be sold under the Cable and Wireless brand.

"Cable and Wireless' financial strength, scale and world-class IP infrastructure ensures that Exodus' customers will get the quality and guaranteed continuity of service that they are seeking from providers of mission-critical services," Wallace said in the statement.

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