PSINet Europe was an independent subsidiary of PSINet Inc, a global ISP which once had a valuation of $2bn before the dot com bubble burst and it went bankrupt, until it was acquired by Israel Corp in 2002. It has undergone considerable restructuring since, and now boasts annual earnings before interest taxes depreciation and amortization (EBITDA) of 34m euros ($41.7m) for the five country operations (Belgium, France, Germany, the Netherlands and Switzerland) that Via Net.Works is purchasing.
Reading, UK-based Via Net.Works claims that profits of the acquired business will overtake the amount paid in the transaction within three years. It will pay 10m euros ($12.3m) when the transaction closes – expected to be within the next 10 days – with the remaining 8m euros ($9.8m) being paid in two installments over the next 15 months.
Via Net.Works claims that the acquisition will increase its annual revenues to over $110m, and that synergies would allow it to cut costs by over $4m a year, through actions to be taken in the fourth quarter of 2004.
