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Upon recommendation by its special committee, which was appointed to evaluate the advisability of the transaction, the agreement was approved by the Board of Directors of Arbinet and by the Board of Directors of Primus.

The combined company will be led by Peter D. Aquino, chairman, president, and CEO of Primus and upon the closing of the transaction, an integration team comprising of executives of both companies will make recommendations on how best to organize the combined company.

Under the terms of the agreement, Arbinet common shareholders will receive shares of Primus common stock in exchange for the Arbinet common stock they own. The merger agreement is subject to regulatory approvals and the approval of the stockholders of both companies. This is in addition to other customary closing conditions. The first quarter of 2011 is expected to see the transaction completed.

The agreement contains a go-shop provision under which Arbinet may solicit alternative proposals from third parties during the next 45 calendar days. There can be no assurances that this process will result in an alternative transaction.

Upon closing, Primus intends to integrate Arbinet's operations into its Global Wholesale Group. This is expected to result in a diversified product portfolio of international voice and data services across wholesale customer segments. The anticipated increased global reach is expected to provide additional market opportunities for retail and carrier wholesale interconnectivity. 

Shawn O'Donnell, president and CEO of Arbinet, believed that the transaction would allow Arbinet to respond more effectively to marketplace challenges through enhanced scale, expanded reach, and improved products and services.

Aquino said that with the additional global reach through Arbinet's exchange, Primus would gain access to additional traffic streams, better routes for termination of voice traffic and the ability to manage multiple segments of carrier customers.

The BankStreet Group LLC is serving as Arbinet's financial advisor, and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is serving as its legal advisor.