NET.WORKS, Inc. (Nasdaq: VNWI; Euronext), a provider of business communication
solutions to small- and medium-sized enterprises in Europe and the U.S., today
announced that it has signed a letter of intent with Claranet, an independent
and privately held European internet service provider. Under the terms of the
letter of intent, Claranet would purchase all VIA’s business operations for a
total of between $26.5 million to $27 million in cash.
In signing the letter of intent, Claranet has paid a deposit of $3 million
against the purchase price to secure exclusive negotiation rights with VIA
until 30 April.
VIA noted that the key terms of the letter of intent are as follows:
* Claranet would acquire all of VIA's European and U.S. businesses, including PSINet Europe operations and the Amen Group.
* Claranet would acquire certain assets and liabilities of the parent company, VIA NET.WORKS, Inc., pertaining to VIA's centralized back office financial and technical support systems, but other assets and liabilities would not be assumed.
* The transaction would be subject to approval by the VIA NET.WORKS, Inc. shareholders; a proxy statement would be distributed as soon as possible after signing of definitive agreements and review by the Securities and Exchange Commission.
* For the period between the signing of the definitive purchase agreement and closing of the transaction, Claranet would provide an interim working capital facility up to $6 million, secured by pledges by VIA of shares in certain of its European subsidiaries; the purchase price would be reduced by the amount that VIA drew down on this facility.
VIA further noted that Claranet’s offer has resulted from an active
bidding process during which a number of financial and industry participants
have extended proposals for debt and equity financing or acquisition of all or
parts of VIA’s businesses.
Ray Walsh, VIA’s Chief Executive Officer, stated: “We have undertaken an
intensive process these past several weeks working in parallel with a number
of potential strategic partners to negotiate the best transaction for our
shareholders. We also believe that Claranet’s offer will provide the best
value for our employees, customers, creditors and other constituencies. We
know and feel comfortable with their executive team, having sold our UK
operation to Claranet last September.”
Charles Nasser, Claranet’s Chief Executive Officer, stated: “Following our
past acquisitions on the continent and last year’s acquisition of VIA’s UK
operations, Claranet is consolidating its position as a leading European
provider of communication services to business, adding to the group’s future
revenues and profits. We look forward to working with VIA’s customers and
staff and continuing to invest in our growth.”
VIA stated that, on entering a definitive purchase agreement with
Claranet, it would expect to convene a meeting of its shareholders within the
next two or three months to consider the transaction for approval. The
company also stated that with this letter of intent in hand and definitive
agreements with Claranet being sought by no later than April 30th, it expects
to complete and file its Annual Report on Form 10-K for 2004. Further
information about the proposed transaction would be included in the proxy
On completion of a transaction with Claranet, VIA NET.WORKS, Inc. would
expect to dispose of remaining portions of its business not purchased by
Claranet, pay amounts owed and distribute remaining funds to its shareholders.
Further financial details, including pro forma estimates of amounts expected
to be distributed to shareholders after payment of liabilities, would be
provided in VIA’s proxy statement to its shareholders.
The definitive agreements would be subject to various conditions to
completion, including absence of material adverse change in VIA’s business.
There can be no assurance that VIA will be successful in negotiating the
definitive agreements or achieving completion of the proposed transaction.