Atlanta, Georgia – (The Hosting News) – April 14, 2006 –
Virtual Private Network firm, New Edge Networks, has been acquired by Internet service provider, Earthlink Inc.
Under the terms of the merger agreement, EarthLink has acquired 100 percent of New Edge Networks for 2.6 million shares of EarthLink common stock and $114.3 million in cash, including cash to be used to satisfy certain liabilities.
Bill Heys, President of EarthLink’s value and small to medium enterprises business unit commented, ”This acquisition forms the nucleus for EarthLink’s continued expansion into the fast growing business network market. We believe that New Edge Networks’ national coverage called ‘BigFoot,’ proprietary systems, and practical know-how are strong competitive advantages.”
Dan Moffat, President of New Edge Networks added, ”New Edge Networks expects to expand its service offerings, step up its marketing and sales campaigns, expand its network, and enhance back-office systems. We are excited about the growth prospects this merger represents.”
The merger agreement required EarthLink to grant options to purchase up to 657,000 shares of its common stock to New Edge Networks employees. These options are ”inducement grants” to new employees in connection with EarthLink’s acquisition of New Edge Networks that qualify under the “inducement grant exception” to the shareholder approval requirement of NASD Marketplace Rule 4350(i)(1)(A).
In connection with the closing, the Compensation Committee of the EarthLink Board of Directors approved the EarthLink, Inc. Stock Option Plan for Inducement Awards Relating to the Acquisition of New Edge Holding Company. The Compensation Committee then granted options to purchase 657,000 shares of EarthLink common stock to these New Edge Networks employees in accordance with this Plan.
The options have an exercise price equal to the last reported price of EarthLink common stock on the closing date and vest 25 percent after 12 months and then 6.25 percent each quarter thereafter. The options have a term of ten years. Approximately 250 New Edge Networks employees are receiving EarthLink options under this Plan.
EarthLink also granted New Edge Networks employees restricted stock units for 295,000 shares of EarthLink common stock under the EarthLink Stock Incentive Plan. About New Edge Networks New Edge Networks builds and manages broadband networks for businesses and communications carriers.
Through its nationwide network of more than 850 switches and Internet routers, New Edge Networks uses various broadband access technologies for building business networks. These include all types of DSL, Frame Relay, ATM, cable modems, and Satellite. Its network coverage reaches 100 percent of U. S. business addresses. New Edge Networks’ product suite of managed WAN and VPN services received Frost and Sullivan’s Telecommunications Services 2005 Product of the Year Award.
To learn more about New Edge Networks, please visit: www.newedgenetworks.com.
For more information about EarthLink, please visit: www.earthlink.net.