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EXHIBIT 99.01
Exodus Logo Global Crossing Logo
FOR IMMEDIATE RELEASE
EXODUS TO ACQUIRE GLOBALCENTER FOR $6.5 BILLION
Combination Creates the Premier Company in Complex Web Hosting Worldwide
Exodus and Global Crossing Enter Into Long-term Network Agreement
Exodus and Asia Global Crossing to Form Joint Venture in Asia
Santa Clara, CA and Hamilton, Bermuda (September 28, 2000) - Exodus
Communications,(TM) Inc. [Nasdaq:EXDS] and Global Crossing Ltd. [Nasdaq:GBLX]
announced today that their boards of directors have approved a definitive merger
agreement under which Exodus(R) will acquire GlobalCenter Inc., a wholly owned
subsidiary of Global Crossing. Exodus will issue a number of common equivalent
shares equal to $6.525 billion divided by the average closing price of Exodus
stock prior to the closing of the transaction, subject to a collar. Based on the
collar and Exodus' closing stock price of $53.25 on September 27, 2000, the
current value of the transaction is approximately $6.1 billion. The transaction
is expected to be accretive to Exodus' EBITDA in 2001. The transaction will be
accounted for as a purchase and is expected to close in the first quarter of
2001.
Exodus and GlobalCenter are leading providers of complex web hosting services to
business customers worldwide. The two companies would have a pro forma
annualized recurring revenue run rate of approximately $1.0 billion (as of June
30, 2000 assuming the Exodus customer backlog is installed and combined with the
current installed customer base). The combined company would have 32 Internet
Data Centers totaling approximately 2.6 million gross square feet, almost 4,000
customers, and strategic partners that include Cisco, Compaq, Dell, Inktomi,
Microsoft, Oracle, Softbank and Sun Microsystems. The combined company will be
positioned to capture new opportunities in the rapidly growing U.S. web hosting
market which, according to a Forrester Research report issued earlier this year,
is expected to reach approximately $20 billion in 2004.
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Exodus and Global Crossing Enter Into Long-term Network Agreement
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Exodus and Global Crossing also signed a 10-year network services agreement.
Under the agreement, Global Crossing becomes the primary network provider to
Exodus worldwide, and Exodus will purchase 50% or more of its future network
needs outside of Asia from Global Crossing. In return, Global Crossing has
agreed to provide Exodus with preferred pricing on all network services and
assets offered by Global Crossing, including circuits, IRUs and dark fiber.
Exodus and Asia Global Crossing to Form Joint Venture in Asia
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As part of the transaction, Exodus and Asia Global Crossing have agreed to form
a joint venture to provide complex web hosting and managed services in Asia.
Exodus will own 67% of the venture and Asia Global Crossing will own 33%. Both
companies would contribute to the joint venture all their Asia region web
hosting related assets. Asia Global Crossing will be the primary network
provider for Exodus Asia Pacific in Asia, and the parties intend that 67% of the
new venture's networking needs will be supplied by Asia Global Crossing. Exodus
will manage and operate the joint venture.
Marketing Agreement
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Exodus and Global Crossing have also signed a marketing services agreement
whereby Global Crossing will offer and co-brand Exodus' web hosting services to
Global Crossing's network services customers.
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Benefits of the Transaction
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Ellen M. Hancock, chairman and chief executive officer of Exodus, said, "Today's
announcement represents a major strategic milestone for our company. This
combination will give us the additional scale, scope and international reach to
extend our position as the preferred provider of mission-critical web hosting
solutions to customers worldwide. Our global network of Internet Data Centers
will now be `on net' with Global Crossing's state-of-the-art international IP
network, providing Exodus with superior network quality of service. With
GlobalCenter, we will have an expanded customer base into which we can sell our
comprehensive suite of managed services. These critical advantages, coupled
with the extraordinary depth of talent our combination creates, will enable us
to continue to provide the leading edge solutions that our customers demand."
Ms. Hancock continued, "As the customer requirements for high-end, value-added
web hosting services become more sophisticated, only a handful of companies will
have what it takes to succeed. By joining forces with GlobalCenter and Global
Crossing, we will have a broader geographic presence and a stronger worldwide
network to extend our leadership position. In addition, both Exodus and
GlobalCenter have employees who are highly skilled in Internet technologies and
are dedicated to providing high quality services and support to customers with
mission-critical Internet operations. This transaction clearly raises the bar
again for the entire complex web hosting market."
"Under the agreement announced today, Global Crossing and Exodus are creating an
unprecedented alliance, combining complex web hosting and the world's most
advanced broadband Internet protocol network in markets around the world," said
Global Crossing founder and chairman, Gary Winnick.
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"At the start of this year, we promised Global Crossing's shareholders that we
would quickly increase the value of our GlobalCenter subsidiary and take steps
to realize such value for our shareholders," said Leo J. Hindery, Jr., chief
executive officer of Global Crossing and chairman and CEO of GlobalCenter. "Our
first intention was to take these assets public, but the merger of GlobalCenter
and Exodus better achieves our goals, bringing Exodus and Global Crossing
together in an extraordinary and unparalleled high-growth partnership."
"This alliance has a significant time-to-market advantage in providing complex
web hosting services, which should attract multinational customers at an
accelerated pace. Global Crossing remains committed to providing seamless
connectivity and universal access to information resources across oceans, across
borders, and from desktop to desktop in the major cities of the world. Our new
joint marketing agreement allows us to offer Exodus' leading web hosting
services as an element of our service offerings to global enterprises,"
concluded Mr. Hindery.
Transaction Details
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After the close of the transaction, Exodus expects to realize efficiencies as a
result of the scale achieved by the combination, including substantial savings
in the areas of network and other operating costs. In addition, the potential
to deliver managed services across a much broader platform and to leverage the
combined distribution channels provides an outstanding opportunity. The
transaction is not expected to result in any workforce reductions.
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Under the terms of the agreement, if the average closing price of Exodus common
stock for the ten trading days preceding the close of the transaction is between
$56.40 and $65.55, Exodus will issue a number of shares and options with a value
equal to $6.525 billion, to be determined using such average price. If the
average closing price for the ten-day period is below $56.41, Exodus will issue
115.7 million fully diluted shares; if the average closing price for the ten-day
period is higher than $65.55, Exodus will issue 99.5 million fully diluted
shares. After the close of the transaction, Global Crossing and Global Center's
optionees together will own approximately 16.1% to 18.3% percent of the fully
diluted common equity of Exodus. Global Crossing will be subject to certain
sale restrictions on its Exodus stock for a period of one year following
closing. The acquisition is conditioned upon, among other things, approval by
Exodus stockholders and customary regulatory approvals.
Donaldson, Lufkin & Jenrette Securities Corp.; Goldman, Sachs & Co.; and Thomas
Weisel Partners Merchant Banking served as financial advisors to Exodus, and
Fenwick & West LLP served as legal counsel. Morgan Stanley Dean Witter served
as financial advisor to Global Crossing and GlobalCenter; and Gibson, Dunn &
Crutcher LLP and Simpson Thacher & Bartlett served as legal counsel.
About Global Crossing
Global Crossing Ltd. (Nasdaq: GBLX) is building and offering services over the
world's most extensive global IP-based fiber optic network, which will have more
than 101,000 route miles, serving five continents, 27 countries and more than
200 major cities. Global Crossing's operations are headquartered in Hamilton,
Bermuda, with principal offices in Los Angeles, California; London, England;
Amsterdam, The Netherlands; Morristown, New Jersey; Rochester, New York;
Sunnyvale, California; and Miami, Florida. Visit Global Crossing at www.Global
Crossing.com on the Web.
About Exodus
Exodus Communications (Nasdaq: EXDS) is a leading provider of complex Internet
hosting for enterprises with mission-critical Internet operations. The company
offers sophisticated system and network management solutions along with
professional technology services to provide optimal performance for customers'
Web sites. Exodus manages its network infrastructure via a worldwide network of
Internet Data Centers (IDCs) located in North America, Europe and Asia Pacific.
More information on Exodus can be found at www.Exodus.com
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Forward-looking Language
This press release contains forward-looking statements based on current
expectations. Actual results may differ materially from expectations due to a
number of risks and uncertainties, including, but not limited to the following:
the fulfillment of conditions to complete the merger, including regulatory and
Exodus stockholder approval; the costs incurred to complete the merger; the
combined company's competitive performance; potential difficulties in
integrating the two companies, their product and service offerings and
infrastructure; the ability of the combined company to achieve network cost
savings and operating efficiencies; the continued employment of the combined
entity's employees; potential difficulties in maintaining and enhancing
continued working relationships with strategic partners; the risk that customers
that have placed orders may cancel or reduce their orders or delay the
commencement of services; and the continued development of service offerings of
the combined company. Actual results may also vary from expectations as a
result of risks and uncertainties described from time to time in Exodus' and
Global Crossing's filings with the Securities and Exchange Commission (SEC). In
particular, see "Factors Affecting Future Results" in Exodus's quarterly and
annual reports filed with the SEC and see "Risk Factors" in Global Crossing's
quarterly and annual reports filed with the SEC. Neither Exodus nor Global
Crossing assumes any obligation to update the forward-looking information
contained in this press release.
In connection with this transaction, Exodus will be filing a Proxy Statement
with the Securities and Exchange Commission. SECURITY HOLDERS OF EXODUS ARE
URGED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION REGARDING THIS BUSINESS COMBINATION. Investors
and security holders may obtain a free copy of the proxy statement when it
becomes available at the SEC's website at www.sec.gov.
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Financial Analyst Conference:
There will be a financial analyst conference call today at 10:30 AM EDT / 7:30
AM PDT to discuss the transaction. To listen to the teleconference, please call
(888) 849-9184. For individuals outside of the US, please call (212) 896-6104.
It can be monitored via the world wide web at www.dealinfo.com/Exodus. The
reservation number for the webcast is 16489940. Real Network's Real Player or
Microsoft Media Player is required to access the webcast. They can be
downloaded from www.real.com or www.microsoft.com/windows/mediaplayer.
Media Teleconference:
There will be a media teleconference call today at 12:00 PM EDT / 9:00 AM PDT to
discuss the transaction. To participate in the teleconference please call:
(888) 849-9214. For individuals outside of the US, please call (212) 676-5268.
Due to the expected number of callers, please call at least 15 minutes before
the conference is to begin. Ask to be connected to the Exodus/Global Crossing
teleconference.
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Satellite Uplink for B-roll:
Thursday, September 28, 2000 Thursday, September 28, 2000
8:00 to 8:30 AM EDT 12:00 to 12:30 PM EDT
Telstar 4; Transponder 6 C-band Telstar 4; Transponder 6 C-band
Downlink frequency 3820 horizontal Downlink frequency 3820 horizontal
If you have any technical questions or problems with the satellite feed for B-
roll, please call Brett Curran at (212) 627-5622.
Contacts for Exodus Contacts for Global Crossing
Investors: Investors:
Jane Underwood Ken Simril
(408) 346-2191 (800) 836-0342
[email protected] [email protected]
Media: Media:
Maureen O'Connell Kim Polan
(408) 346-2218 212-687-8080
[email protected] [email protected]
Contacts for GlobalCenter
Media:
Secret Fenton
408-543-9060
[email protected]
Trademark Info: Exodus and Exodus Communications are trademarks of Exodus
Communications, Inc. and are registered in certain jurisdictions. All other
trademarks mentioned in this document are the property of their respective
owners.
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