Atlanta, Georgia – (The Hosting News) – December 13, 2005 –
ISP and web hosting company, EarthLink,
Inc., has executed a definitive agreement to acquire New Edge Networks. The company is a privately-held single-source national provider of private Virtual Private Networks (VPNs) and secure multi-site managed data networks and dedicated access for businesses and communications carriers.
The acquisition of New Edge Networks will enable EarthLink to expand its business in the fast growing small and medium business market. The Vancouver, Washington-based company will give EarthLink one of the largest data communications networks in the country and a customer base that is expected to generate approximately $120 million in revenues in 2005.
Together, EarthLink and New Edge Networks will be able to package their voice, data, protection, and security tools to meet the rapidly growing demand for high-speed access and VPN services by both small office and home office (SOHO) users as well as small and medium enterprise (SME) customers.
Accroding to Bill Heys, President of EarthLink’s Value and Small to Medium Enterprises Business Unit, ”New Edge Networks is a tremendous growth platform for EarthLink to compete in the rapidly expanding SME networking market. This acquisition builds upon our existing suite of award-winning services for small businesses and gives New Edge Networks the added resources to strengthen its market position.”
Dan Moffat, President and CEO of New Edge Networks added, ”When we bring together EarthLink’s financial resources and reputation for outstanding customer service with our national network and proven track record of performance, we will be uniquely positioned for serving our customers and tapping the growing market for business networks. We believe this transaction benefits customers, investors and employees of both companies.”
Under the terms of the agreement, EarthLink will acquire 100 percent of New Edge Networks in a merger transaction for approximately $144 million, consisting of 2.6 million shares of EarthLink common stock and $114.3 million in cash, including cash to be used to satisfy certain liabilities.
The acquisition, which is subject to regulatory approvals and customary closing conditions, is expected to close in the first quarter of 2006. EarthLink plans to retain New Edge Networks’ 345 employees and the New Edge Networks brand and operate the company as a wholly-owned subsidiary of EarthLink. New Edge Networks will continue to be based in Vancouver, Washington. With more than 20 years in the telecommunications industry, Dan Moffat will remain as president of New Edge Networks after the acquisition is completed.
For further information, please visit: www.earthlink.net.