Cogent buys T-1 assets from Verio

Cogent Communications has acquired the majority of Verio's T-1 Internet access business, the latest in a strong of acquisitions designed to help Cogent realize greater usage of it capacious IP network.

The agreement between Cogent and Verio includes both customers and the infrastructure to support them. Cogent will pick up 2400 customers in 23 markets, in all of which Cogent already sells service. However, Dave Schaeffer, CEO of Cogent, said the deal wasn't made with geographical expansion in mind. "This deal makes sense because we are currently using only about 4% of our network capacity, and it's hard to maintain an independent network if your capacity isn't being used," he said.

Schaeffer added that Verio's T-1 customers can bring Cogent an immediate source of revenue, while the ISP works in the coming weeks to begin migrating the new customers to Cogent's 80 Gb/s fiber optic backbone.

Verio, a subsidiary of Japan's NTT Communications, intends to continue to focus on global hosting, managed services and "higher-value" Internet access and network solutions, according to a statement from Greg Conley, CEO of Verio.

Cogent has been offering T-1 and T-3 services for the last two years. Schaeffer said aquisitions weren't part of the company's original business plan in 1999, but since 2002, Cogent has acquired 13 companies, with seven of those deals having been made this year alone.

"Some of our first deals were for physical assets, but more recently they have been about improving our network utilization," he said.

Financial terms of the deal were not disclosed, but Schaeffer said Cogent's acquisitions have been executed using a variety of different financial recipes. "Some of the deals have been net cash accretive, some of them have been a combination of stock and cash," Schaeffer said. "It really depends."