Cogent grabs PSINet assets

Cogent Communications, a metropolitan Ethernet service provider, announced Wednesday that it is buying up PSINet's U.S. network and customer assets.

Cogent plans to purchase PSINet's "major U.S. operating assets," which include a portion of the company's customers, network, equipment and three hosting centers.

PSINet filed for bankruptcy protection in June of last year after being delisted from NASDAQ. The stock market delisted the company's stock shortly after PSINet announced job cuts and a fourth-quarter loss of $3.2 billion last April.

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Since the company's Chapter 11 filing it sold its Japanese division to Cable & Wireless for $10.2 million. In addition, as a last ditch effort to raise cash before filing for bankruptcy, PSINet sold off its Transaction Network Services division to private equity firm GTCR Golder Rauner for $300 million.

While PSINet still has some international assets, the majority of the once high-flying ISP will be dissolved if the bankruptcy court approves Cogent's acquisition.

This is Cogent's second purchase of a troubled service provider. The company also purchased failing in-building network service Allied Riser Communications last year.