|
PSINet buys Transaction
|
 |
August 23, 1999: 10:53 a.m. ET
Shares in e-commerce networking firm soar amid $720M takeover by ISP
|
NEW YORK (CNNfn) - Internet service provider PSINet Inc. agreed Monday to buy Transaction Network Services Inc., a data communications and electronic commerce networking firm, for $720 million in cash and stock.
Shares in both companies advanced on the announcement. Transaction Network (TNI) surged 10-1/2, or about 31 percent, to 44-3/4, adding to gains posted Friday. PSINet (PSIX) stock rose 3-5/16 to 48-7/8 early Monday.
Under the deal, PSINet values Transaction Network (TNI) shares at about $45.28 apiece, based on Friday's closing prices. That price is based on $22.50 in cash plus one-half share of PSINet common stock for each of TNI's 13.2 million shares outstanding.
The purchase price consists of $351 million in cash and up to 7.8 million PSINet common shares. Shareholders may choose cash, PSINet stock or both, the company said.
Shares of Transaction Network
over the past two months.
The majority of Transaction Network's revenue comes from online credit card and other point-of-sale transactions. The company says it handles more than 70 percent of the electronic point-of-sale transactions in the U.S., processing more than 20 million transactions per day from 2 million businesses.
The deal "represents the first combination of a market-leading e-commerce enterprise with a global facilities-based Internet service provider," William L. Schrader, PSINet chairman and CEO, said in a statement.
The deal is expected to close in the fourth quarter, pending regulatory and shareholder approval, and is expected to add immediately to PSINet's earnings.
PSINet said shareholders representing approximately 15 percent of TNI's outstanding shares -- including TNI's chief executive John McDonnell Jr. -- already have approved the acquisition.
Both firms are based in northern Virginia, near Washington, D.C. 
|
|
|
|
|
|
PSINet
TNSI
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
