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Loudcloud to buy small rival

Managed service provider Loudcloud has agreed to buy rival company Frontera in an all-stock transaction.

Loudcloud was founded in 1999 by former Netscape Communications head Marc Andreessen, who serves as its chairman. The company supports customers with its management services platform called Opsware.

The company was one of a small handful of Internet-related startups to go public last year when investors began to shy away from funding losing companies. Loudcloud has reported continued losses since its inception.

Loudcloud will post its annual report on 7 March, when it is expected to report losses of about $112m (£78.8m) on revenue of $57m (£40m). The company reported cash assets of about $140m (£98.5m) in November.

The acquisition of Frontera will increase the company's customer base and expand its market to a new regional market, Loudcloud said. The company's customers already include Rupert Murdoch's News Corporation. and Ford.

The acquisition is expected to be completed in the second quarter of 2002.

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