Easynet snaps up Ipsaris

June 27, 2001 Posted: 0824 GMT

LONDON (CNN) -- Easynet Group agreed on Wednesday to buy Marconi's Ipsaris unit for 354 million pounds ($502 million) in shares

The UK telecom services company and Internet service provider plans to buy Ipsaris, which owns and operates fibre-optics networks, to beef up its broadband services to business clients in the UK and France.

The acquisition "will accelerate our strategy of delivering broadband services to business customers," Easynet Chief Executive David Rowe said.

Easynet (ESY) will combine its sales force, customer base, IP (Internet protocol) skills with Ipsaris's network assets, IT systems and engineering know-how.

Of its 27,100 customers, 7,000 use digital subscriber lines (DSL), or dedicated digital services, from incumbent operators, such as British Telecom (BT-A) and France Telecom (PFTE).

Marconi, Britain's biggest telecom equipment maker, and the minority shareholders in Ipsaris – Railtrack (RTK) and British Waterways Board -- will receive 82.9 million Easynet shares.

Those Easynet shares closed at 427.5 pence on Tuesday. After the acquisition, the enlarged group will be worth some £475 million, Easynet said.

Marconi, which owns 92 percent of Ipsaris, will become the biggest shareholder in Easynet. Marconi (MONI) shares rose 2.5 percent to 242.75 pence in early London trade.

Easynet shares were suspended Wednesday morning after the announcement because the acquisition is structured as a reverse takeover, as Easynet is smaller than Ipsaris.

David Rowe will be executive chairman of the enlarged group. Neil Rafferty, chief executive of Ipsaris, and Will Gardiner, chief financial officer of Ipsaris, will assume those roles at Easynet.

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