British telecommunications company Cable & Wireless on Thursday announced it has gotten the go-ahead from a U.S. bankruptcy court to buy a majority of beleaguered Web hosting firm Exodus Communications.
Exodus and C&W announced the deal in November but were awaiting court approval. Under terms of the deal, C&W will acquire a majority of Exodus' business operations, including its brand name and intellectual property, for $850 million.
Analysts say the deal will shoot C&W into the forefront of the Web hosting industry. The network service provider acquired managed hosting firm Digital Island in May for $340 million, adding 10 data centers to its 23 existing facilities (eight of which are Web hosting centers). The Exodus purchase adds 30 data centers and some 3,500 customers, C&W says.
The U.S. Bankruptcy Court in Delaware, Md., which is overseeing Exodus' Chapter 11 procedures, approved the U.S. portion of the deal, which includes 26 data centers in the United States. C&W's proposed acquisition of Exodus operations and data centers in London, Frankfurt and Tokyo come under a separate agreement, which is still under discussion, C&W says.
The approved transaction is expected to close in late January or early February.
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