Memories, for my former friends and colleagues around the world. - REUTERS AND EQUANT CREATE NEW GLOBAL IP NETWORK COMPANY FOR FINANCIAL MARKETS LONDON AND ATLANTA (3 February 2000) -- Reuters (RTR.L), the information and news group, and Equant (NYSE: ENT) (Paris Bourse: EQU), have agreed to form a new company to offer the worlds largest secure Internet Protocol (IP) network to the financial services industry. The new company will offer financial services customers secure, fast, business-to-business Internet and telecommunications services with high levels of resilience. It will combine Reuters specialist and in-depth knowledge of financial services and content distribution with Equants solutions and expertise in operating a secure, global IP network. It will exploit Reuters network, which currently has more than 60,000 connections to financial services customers sites worldwide. The new company will focus on a potential US$13 billion market opportunity for high-value technology and communications services to customers who value the capability and ubiquity of the Internet, but require a network that is specifically tailored for their needs. Financial market participants will be able to gain access to information, conduct transactions and engage in e-commerce initiatives with their retail customers quickly and securely over the new companys global IP network. Reuters will own 51% of the new company. Subject to necessary approvals, Reuters will transfer US$130 million of telecommunications network assets into the new entity along with over 400 staff. It will also sell Reuters Connect Services, Reuters existing telecommunications business serving the financial community, to the new company for US$25 million in cash. Equant will own 49% of the new company. Equant will contribute approximately 100 staff and US$230 million in cash to the new company. It will also provide US$125 million of other services and contribute an additional US$25 million of annual contracted revenue from its existing financial services customers. Equant will supply network services under a 10-year agreement, which is expected to be worth approximately US$100 million in the first full year of operation. Equant should also benefit from growth in the new companys revenues. The new company plans to become operational by mid-2000, subject to regulatory and other approvals. It will have up to 600 staff and initially expects to have annualized revenue of more than US$400 million. At commencement, revenues will mostly be from a network services contract with Reuters but revenues from new customers are anticipated to grow rapidly. The new company is not expected to show a profit for at least two years. The new company will work closely with Tibco Software (TIBX) to enable the delivery of TIB-based applications over its network. This will allow companies that have invested in the TIB technology for enterprise-wide applications to extend those applications to their clients, their suppliers, and their extended communities of interest. Headquarters for the new company will be in New York and it will have significant operations in the worlds major financial centers. David Ure, an executive director of Reuters, will be non-executive chairman and Doug Gilstrap, chief operating officer, Equants Network Services Division, will be the chief executive of the new company. Reuters and Equant will each appoint two additional directors to the board. Peter Job, chief executive, Reuters, commented: The unique combination of our valuable position in the financial markets with Equants telecommunications network expertise will create an extranet-based company of great potential for this large and valuable customer base. It is an exciting and imaginative deal, which will allow clients to extend their links throughout the financial markets using a robust cost-effective telecommunications network. Further, it will contribute to the remodelling of our cost base and will accelerate our shift in infrastructure and product development towards the Internet
Posted on: Mon, 03 Feb 2014 15:43:31 +0000
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