PSInet To Boost Business Services Through Acquisition

Looking to diversify beyond offering Internet access and Web-hosting services, Internet service provider PSInet Inc. plans to acquire Transaction Network Services Inc. for roughly $700 million in a cash-and-stock deal that could close by year's end.

PSInet says it plans to eventually offer all the components needed for the combined companies' customers to do business over the Internet. PSInet, which operates a 21-country IP network, will get the transaction-processing resources needed to offer robust E-commerce services, as well as TNS's financial services customers. TNS operates in six locations outside the United States: Australia, France, Ireland, Japan, Sweden, and the United Kingdom.

PSInet is best known for being among the first companies to offer Internet access. It plans, with TNS, to offer its customers a package of business services, including Web hosting, application hosting, and transaction services.

TNS will eventually be integrated with PSInet, officials say. The combined companies will have about 2,800 employees worldwide. No word yet on whether any employees will be laid off.