Updated from 7:32 a.m.
soared Wednesday on news that the technology consulting company would be acquired by
, an Internet service provider, for stock valued at $1.9 billion.
Metamor gained 17 5/16, or 108%, to close at 33 5/16 on heavy trading volume of 19.5 million shares, compared with an average daily volume around 650,000 shares. PSINet fell 7 15/16, or 16%, to 41 9/16.
Under the terms of the deal, PSINet will exchange 0.9 share of its stock for each share of Metamor. Based on PSINet's closing price Wednesday, the deal valued Metamor at about $37.40 a share, a premium of more than 130% over Metamor's closing price of $16 on Tuesday.
Herndon, Va.-based PSINet, which provides Internet access and other services to businesses, said the deal would immediately be accretive to its bottom line.
"The acquisition of Metamor furthers our plans to move into the applications outsourcing arena and enables us to offer our customers everything they need to do business on the Web," said William L. Schrader, chairman and chief executive of PSINet, in a statement. "Metamor's services provide an excellent complement to our global hosting capabilities."
Houston-based Metamor's operations include e-business support, systems maintenance, enterprise resource planning implementation, process improvement, network integration and training. The agreement also gives PSINet a controlling interest in e-business consultant
. Metamor owns 80% of Xpeditor.
The deal, which is subject to shareholder and certain regulatory approvals, is expected to close by the middle of the year.