Global Crossing to Acquire IXnet, a High Growth Provider of IP-based Network Services to Global Financial Community, and Parent Company, IPC Communications, for $3.8B in Stock - Company Business and Marketing

Cambridge Telcom Report, Feb 28, 2000

-- IXnet provides single "pipe" IP connectivity to more than 600 financial institutions for global trading and communications.

-- IXnet hosts and distributes market data, news, streaming video, research and analytics for more than 30 leading content providers to the global financial community.

-- IXnet has points of presence in 37 countries, 1,450 customer access nodes, and a strong management and sales force experienced in serving multinational financial institutions.

-- Expands Global Crossing's customer relationships in the financial community, adding such premier clients as Citigroup, Chase, Goldman Sachs, Merrill Lynch, Morgan Stanley, Bear Stearns, Deutsche Bank, ABN AMRO, NatWest, HSBC, and Nomura.

-- IXnet will use Global Crossing Network instead of leased lines to provide global bandwidth, substantially reducing costs and creating new growth opportunities.

-- IPC Communications is the No. 1 provider of sophisticated desktop trading systems to financial institutions, with a 60% share of the worldwide market.

Global Crossing Ltd. (Nasdaq:GBLX), which is building and operating the world's most advanced global IP-based fiber optic network, and IXnet, Inc. (Nasdaq:EXNT), the leading provider of specialized IP-based network services to the global financial services community, Tuesday announced a definitive agreement for Global Crossing to acquire IXnet, Inc.

Founded in 1995, IXnet provides desktop-to-desktop broadband data and voice services to more than 600 leading financial institutions worldwide, including investment and commercial banks, asset managers, broker/dealers, and trading firms. IXnet also hosts and distributes market data, news, streaming video, research and analytics for more than 30 leading content providers to the global financial community. IXnet has points of presence in 37 countries, 1,450 customer access nodes (intelligent network gateways), and a strong management team and sales force with unparalleled experience serving the data, voice and video needs of global financial institutions.

Global Crossing will acquire both IXnet and its parent company, IPC Communications, Inc. (AMEX:IPI), which owns approximately 73% of IXnet's fully diluted shares. IPC is the leading provider of sophisticated desktop trading systems to the global financial community with a market share estimated at 70% of the U.S. market and 60% worldwide.

Under the terms of the definitive merger agreement, 1.184 Global Crossing shares will be exchanged for each IXnet share not owned by IPC and 5.417 Global Crossing shares will be exchanged for each share of IPC. Based on Friday's closing price of Global Crossing shares, the transaction is valued at approximately $62.03 for each of Ixnet's 59.2 million fully diluted shares, and $283.71 for each of IPC's 10.1 million IPC fully diluted shares, or a total of approximately $3.8 billion. This transaction values IXnet at a total of approximately $3.65 billion, and values IPC shares -- excluding the value of the IXnet shares owned by IPC -- at a total of approximately $150 million.

Bob Annunziata, CEO of Global Crossing, said, "IXnet is a great strategic fit for us. We will now move to the next level beyond providing building-to-building connectivity in major cities -- providing desktop-to-desktop connectivity for multinational corporations worldwide. IXnet will leverage our seamless global network through the provision of sophisticated IP and data services to financial institutions, one of the largest and fastest growing customer segments. We can also eliminate substantial network costs by moving IXnet from leased lines onto the Global Crossing Network, which is nearing completion. IXnet will give us new capabilities and increased presence in Asia where we are currently partnering with Microsoft, Softbank and Hutchison Whampoa, as well as in the financial markets of Europe and the Americas where it is already the market leader. We welcome David Walsh and his superb management team to Global Crossing."

IXnet's blue-chip clients include Morgan Stanley, Goldman Sachs, Merrill Lynch, Citigroup, Chase, Bear Stearns, Donaldson Lufkin & Jenrette, Deutsche Bank, ABN AMRO, NatWest, HSBC, Nomura, Sumitomo, Barclays, Spear Leeds & Kellogg, Fidelity Investments, Janus, many of the leading ECNs, and leading market data providers such as First Call and News Edge. Many of IXnet's customer relationships grew out of existing relationships with IPC, which was founded in the 1970s.

Leo Hindery, CEO of GlobalCenter, Global Crossing's complex web hosting business, said, "Web hosting for financial services firms is a rapidly growing global market, and financial institutions have become the second largest users of web hosting services. We are excited by the prospect of being IXnet's partner for complex web hosting. We will also leverage IPC's dominant position in trading rooms worldwide to increase usage of our complex web hosting and other Global Crossing services."