AT&T to Buy USinternetworking for $300MBy Baselinemag | Posted 2006-09-12 Email Print
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AT&T on Tuesday announced plans to acquire privately held application service provider USinternetworking for about $300 million in cash and assumed debt. The deal is expected to close in the fourth quarter.
AT&T, padding its software-as-a-service portfolio, on Tuesday announced plans to acquire privately held application service provider USinternetworking for about $300 million in cash and assumed debt.
USi, founded in 1998, provides software management services for various business applications, including those from Ariba, IBM, Microsoft and Oracle. The Annapolis, Md.-based company claims to have 150 customers in 30 countries; it says 60% of its revenue comes from companies with annual sales of more than $1 billion.
USi filed for Chapter 11 bankruptcy protection in 2002. That year it received an $81 million investment from Bain Capital and merged with Interpath, another application service provider in which Bain Capital owned a controlling interest.
In seeking to acquire USi, AT&T is looking to expand its data-centric offerings after the company's long-distance business has grown soft in recent years. The long-distance phone and network services company, incorporated in 1885, was acquired last year by SBC Communications in a $16 billion deal. The combined company adopted the more recognizable AT&T name, then this March announced plans to buy regional phone company BellSouth for $67 billion.
Following the acquisition, USi will operate as a wholly owned subsidiary within AT&T's existing enterprise services organization. Andy Stern, USi's chairman and CEO, will join AT&T as CEO of USi after the deal closes, the companies said. AT&T also expects to retain USi's other executives and its domestic and international operations.
"The addition of USi's technology and expertise in applications management to AT&T's global reach, networking expertise and extensive hosting capabilities will broaden the range of solutions for our customers," said Forrest Miller, group president of AT&T's enterprise services group, in a statement.