PSINet buys US ecommerce outfit in $720m deal

PSINet is to buy Transfer Network Services (TNS), the ecommerce and data processing specialists, in a cash and stock deal worth an estimated $720 million. The move is widely regarded as being a shot across the bows of other ecommerce players, such as IBM, UUNet and AT&T. According to reports on Newsbytes, Gary Arlen, president of research firm Arlen Communications, said the buy would boost PSINet's position on the world stage. "They've carved out a place for themselves in the business enterprise sector," he said. "Now they're doing an awful lot to brand themselves." TNS processes about 20 million transactions per day. It provides ecommerce services and secure data communications to the financial sector. On completion, PSINet plans to sell an 'ecommerce in a box' package to TNS's 2 million small and medium sized business customers, according to PSINet's CFO, Edward Postal. PSINet will pay TNSI $350 million in stock and 7.8 million common shares, the remainder will be paid in cash. PSINet expects to gain around $170 million annually thanks to cost savings and increased revenue through the purchase. The two companies plan to finalise the deal by the end of this year. ®