AT&T acquires USi for $300 million

Telecom giant AT&T announced today that it is acquiring Maryland-based application service provider USinternetworking (USi) for $300 million in cash and assumed debts.

The purchase aids AT&T's foray into the business software management market, which research and advisory firm IDC estimates to be worth $21.5 billion, and furthers its existing portfolio of hosting and managed services. Companies increasingly are seeking enterprise management to reduce costs.

USi, which manages popular software from leading providers such as Oracle, Microsoft, PeopleSoft and IBM, will operate as a wholly owned subsidiary in AT&T's enterprise services organization.

"The addition of USi technology and expertise in applications management to AT&T's global reach, networking expertise and extensive hosting capabilities will broaden the range of solutions for our customers," said Forrest Miller, president of AT&T's enterprise services group.

All USi employees are expected to be retained under the deal, scheduled to close in the fourth quarter.

Click here to email reporter Dan Kaplan.

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