Japan’s NTT buys US cloud computing firms for US$875m

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NTT Communications said Monday it would pay a combined US$875 million for two US-based cloud computing firms, marking the latest major overseas acquisition by a Japanese firm.

The telecoms giant said it had agreed to buy Virtela for US$525 million, while it would shell out US$350 million for an 80 per cent stake in RagingWire as it looks to boost its ability to supply online access to software and data storage for big global clients.

The deals come as NTT looks to counter a slowdown in its mainstay long-distance telecom business.

“The acquisition (of RagingWire) will more than double NTT’s data centre space in the US, which will enable the company to respond to high demand for data centre services in North America,” it said in a statement.

It added that the deal was “critical to increasing our overall capacity”.

The global cloud services market for corporate users is expected to reach US$31.9 billion in 2017, a 70 per cent jump from last year.

NTT owns undersea cables and other lines between Europe and the US, but to meet the needs of corporate clients seeking global networks that link offices and plants in different markets, it must obtain line access in each nation from individual providers.

However, Virtela has data networks connecting companies in about 190 countries through partnerships with local data communications providers.

By acquiring the company, NTT would gain instant access to data communication networks that straddle national borders. That would make it easier to set up communication infrastructure for customers scattered worldwide, and cut costs linked to dealing with individual providers.

The deal announced Monday is the latest in a string of acquisitions by Japanese firms, including mobile carrier SoftBank’s US$21.6 billion takeover of US-based SprintNextel earlier this year.

Last month, drinks giant Suntory said it would buy the top-selling Lucozade and Ribena brands from British drugs firm GlaxoSmithKline (GSK) for US$2.1 billion, while bathroom giant Lixil Group agreed to scoop up Germany’s Grohe in a US$4.1 billion deal.

The moves are aimed at expanding beyond Japan’s borders, where firms are wrestling with unfavourable demographics as the population rapidly ages while the birth rate falls.

Despite a sharp decline in the yen since the start of the year, the Japanese currency’s historically high levels in recent years made firms’ overseas acquisitions relatively cheaper.

 

 

 

 

 

Source : Channel News Asia | October 28, 2013

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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