Broadband provider Williams Communications has received the okay from the U.S. Bankruptcy Court in Delaware to buy substantially all the assets of streaming media pioneer iBeam Broadcasting Corp.
Terms of the pact call for Williams to acquire certain iBeam assets, including facility and equipment leases and substantially all customer contracts and intellectual property, for $25 million in cash. Williams will also assume certain liabilities of iBeam, relating to the acquired assets. The deal is expected to close within the next several days, officials said.
Of the total amount, $6 million will be used to repay a loan extended by Williams to iBeam on Oct. 11 to ensure the streaming-media provider's uninterrupted operations during the bankruptcy proceedings.
Sunnyvale, Calif.-based IBeam originally filed for Chapter 11 last month.
Williams' interest in iBeam does not come out of the blue, and indeed could be seen as a protection of its investment. Williams invested $20 million in cash and $10 million in services in the company last June, in exchange for convertible preferred stock representing about a 49 percent ownership stake in iBeam. IBeam aalready has dedicated streaming media and application data centers integrated into Williams' fiber-optic network.
Williams said it will integrate iBeam's streaming and webcasting business into its Vyvx Broadband Media unit, which provides integrated transmission and broadband media services. The company will also offer full- time positions to more than 200 iBeam employees.
The finalization of the Williams deal was announced late Wednesday. At the time, Williams Chairman and Chief Executive Officer (CEO) Howard Janzen said in a statement, "The combination of Williams Communications' award-winning fiber-optic network and broadband media platform with the iBeam assets positions us as a market leader in streaming media. Adding the iBeam capabilities to our mediaXtranet services, which include digital media management, content gathering and distribution, managed Web hosting and streaming, establishes a comprehensive suite of services and capabilities that is unrivaled.
"This deal will also drive a tremendous amount of IP traffic to our network, as iBeam has averaged more than 100 million streams monthly," Janzen also said.
Williams cited a joint McKinsey/JP Morgan Securities study that estimated that 31 percent of the content flowing across the Internet in 2006 would be streaming or rich media, representing a total of 4.03 exabytes, or more than 4 trillion megabytes, of annual traffic.
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