Verio finally finds suitor
Acquirer: NTTType of deal: cash acquisition of Verio Amount: $5 billionLaunched: 7 May 2000Advisers: Deutsche Banc Alex Brown
Japanese telecoms giant NTT already owned a 10% stake in Verio, the US internet service provider, having financed some of the company's start-up costs years earlier. Now Verio was up for sale, and had been courting suitors for some time. NTT, whose US strategy was almost non-existent, decided that it could not allow the company to fall into anyone else's hand.
Foreign takeovers of US companies are nothing new. But NTT's purchase of Verio was a first in other respects. For one, it was a cash deal. "NTT had the resources to do the deal on an all-cash basis. In turbulent markets like we had last spring, investors are attracted to the certainty of an all cash offer," says Monte Koch, head of North American M&A for Deutsche Bank. And it was a cash offer made at a time when the US market for all things technology, telecom and internet-related was extremely volatile following the Nasdaq crash in April.