NTT Communications Corp said it will gain control of two U.S. cloud computing firms in takeover deals worth a combined 85.5 billion yen ($880 million), as Japanese firms ramp up efforts to improve overseas networks through acquisitions.
The unlisted long-distance and overseas calling unit of Nippon Telegraph and Telephone Corp (Tokyo, Japan) will buy Virtela Technology Services Inc (Greenwood Village, CO, USA), which provides communications services to corporations, and acquire an 80 percent stake in RagingWire Data Centers (Sacramento, CA, USA).
Denver, Colorado-based Virtela provides services to corporate clients in more than 190 countries through local partnerships, It will become a wholly owned subsidiary of the Japanese company, helping it to offer data services globally without licensing cables and lines in individual markets.
NTT Communications, which has data centers in Hong Kong and Britain, will expand those operations in the United States with the $350 million investment in California-based RagingWire.
NTT Communications aims to boost revenues from cloud services above 200 billion yen by the year to March 2016, more than double the figure for 2011/12, as it faces declining revenue from voice services.
Cash-rich Japanese firms have been actively acquiring overseas companies in recent years, including in the telecoms and information technology sector. SoftBank Corp (Tokyo, Japan) in July completed its $21.6 billion purchase of Sprint Corp (Overland Park, KS, USA), Japan's biggest overseas acquisition.
($1 = 97.3400 Japanese yen)
(Reporting by Nobuhiro Kubo; Writing by Chang-Ran Kim; Editing by Edwina Gibbs and Ryan Woo)