PacketExchange acquires XchangePoint and gains new investment.(MERGERS AND ACQUISITIONS)

PacketExchange, the Internet peering innovator, announced the acquisition of XchangePoint, the pan-European metro area interconnectivity company, for an undisclosed sum. The acquisition, which follows Bank of Scotland Equity's (HBOS) $3 million investment in PacketExchange in November 2004, forms part of the company's stated aim of accelerating its growth by expansion into continental Europe.

As a result of the deal, PacketExchange expands its direct sales presence in Germany and the Netherlands, and acquires access to XchangePoint's 170-strong customer base. The company's product offering is strengthened with the addition of XchangePoint's metropolitan area services to PacketExchange's international services. It offers customers Ethernet alternatives to traditional Internet services and greatly improved Internet performance. Packet-Exchange can now offer 25 percent of all available routes on the global Internet via its own network.

The deal is underpinned by new investment in PacketExchange from existing XchangePoint investors. This forms part of the continued drive for new investment in PacketExchange. Kieron O'Brien, chief executive officer, PacketExchange, said, "The proven growth potential of PacketExchange, the major factor behind the HBOS investment, will enable us to continue to generate further new investment to achieve our stated goals."