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…the deal closed last week. This means that C&W’s Digital Island unit is toast.

—– Cable & Wireless Completes Exodus Acquisition, Re-brands Hosting Division

Adam Eisner,

February 3, 2002 — (WEB HOST INDUSTRY REVIEW) — Telecommunications firm Cable & Wireless announced Friday that it had completed its acquisition of selected assets of Web hosting firm Exodus Communications. This follows the approval of the transaction by the United States Bankruptcy Court for the District of Delaware, granted January 17.

Cable & Wireless first announced its intention to purchase the hosting firm for $850 million (US), including the assumption of about $270 in assumed liabilities, in late November. However, C&W said today that the final purchase price for the company would be $750 million, $100 million lower than originally estimated. The lowered price is “a result of the finalization of certain estimates outstanding at that time,” a release from C&W said.

Under the agreement, C&W picked up 26 of Exodus’ 44 data centers, representing about 4 million square feet of gross space.

The British telco also said its Web hosting division in the USA will be re-branded “Exodus, a Cable & Wireless Service.” The division will be comprised of both Exodus Communications and managed hosting firm Digital Island, which C&W purchased for $340 million last May. Bill Austin, who joined Exodus in July 2001 and is currently the company’s Chief Financial Officer, will become CEO of the new division.

“Leveraging the global infrastructure and financial strength of Cable & Wireless, we can now offer a broad range of integrated outsourcing solutions to support customers’ evolving business needs,” Austin said.

Exodus originally filed for Chapter 11 bankruptcy protection in September, after having difficulty dealing with its own rapid expansion and the fallout of dot-com businesses, many of which were Exodus clients. According to C&W, Exodus hosts 46 of the Internet’s 150 most visited sites, and has approximately 3,500 customers.