Japan's NTT Comm to buy 2 U.S. cloud computing firms for $880 million

Reuters

* NTT unit to buy Virtela Technology for $530 mln

* NTT Comm to take 80 pct stake in RagingWire for $350 mln

* NTT Comm aims to more than double cloud-related revenue by2015/16

* Japan IT companies buying overseas firms to bolster globalnetworks

TOKYO, Oct 28 (Reuters) - NTT Communications Corp said itwill gain control of two U.S. cloud computing firms in takeoverdeals worth a combined 85.5 billion yen ($880 million), asJapanese firms ramp up efforts to improve overseas networksthrough acquisitions.

The unlisted long-distance and overseas calling unit ofNippon Telegraph and Telephone Corp will buy VirtelaTechnology Services Inc, which provides communications servicesto corporations, and acquire an 80 percent stake in RagingWireData Centers.

Denver, Colorado-based Virtela provides services tocorporate clients in more than 190 countries through localpartnerships, It will become a wholly owned subsidiary of theJapanese company, helping it to offer data services globallywithout licensing cables and lines in individual markets.

NTT Communications, which has data centres in Hong Kong andBritain, will expand those operations in the United States withthe $350 million investment in California-based RagingWire.

NTT Communications aims to boost revenues from cloudservices above 200 billion yen by the year to March 2016, morethan double the figure for 2011/12, as it faces decliningrevenue from voice services.

Cash-rich Japanese firms have been actively acquiringoverseas companies in recent years, including in the telecomsand information technology sector. SoftBank Corp inJuly completed its $21.6 billion purchase of Sprint Corp,Japan's biggest overseas acquisition.

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