NTT to buy cloud computing, data centre firms in US for $875mn

New York: NTT Communications on Monday said it will wholly acquire US-based cloud computing firm Virtela and pick up 80 percent stake in data centre services company RagingWire for about USD 875 million.

Japan-based NTT and Virtela shareholders have entered into a definitive agreement to wholly acquire Virtela for a total transaction price of about USD 525 million in cash.

The information and communications technology (ICT) company said in a statement that it will also acquire around 80 percent equity interest in RagingWire for USD 350 million.

Denver-headquartered Virtela, which employs 400 people, has global operations and delivery centres in the US, India and the Philippines and serves over 500 customers worldwide.

US-based RagingWire designs, builds, and operates mission critical data centres that deliver high-density power and 100 percent availability. It has 650,000 sq ft of critical data center infrastructure in Northern California and Ashburn, Virginia in the US.

"Combining Virtela's advanced service/operational platforms and expertise with NTT's global ICT infrastructure and resources creates an unparallelled company able to deliver cloud networking services, asset-light branch office networking," NTT said.

The acquisition expands NTT?s global network services coverage from 160 to over 190 countries/regions, it added.

On RagingWire, NTT said: "The acquisition 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 is estimated that the US market for data centre services, which accounts for more than 50 percent of global demand, has roughly doubled between 2010 and 2013, it added.

NTT Communications is accelerating its development of global seamless cloud services via 150 data centres globally and is strengthening its one-stop provision of ICT solutions.