Newtek Business Services, Inc. http://www.newtekbusinessservices.com/, a provider of business services and financial products to the small to medium-sized business market, today announced that it has completed its previously announced acquisition of the business CrystalTech Web Hosting, Inc.
The aggregate purchase price was $10,000,000 in cash and $250,000 in Newtek common stock with additional payments of up to a total of $1,250,000 in cash and $1,750,000 in Newtek common stock to be made if the business meets certain profitability benchmarks over the next two years.
Based in Phoenix, Arizona, CrystalTech is currently the third largest Microsoft Windows-only hosting company in the world, with approximately 30,000 customers, 80 percent of which are small to medium-sized businesses, a market which is also the core of Newtek’s market. CrystalTech is profitable, with net earnings in 2003 and 2002 of $2,299,740 and $235,547 on revenues of $5,524,165 and $3,762,057 respectively, and has also achieved customer account growth of approximately 1,100 new hosting accounts per month during 2004.
Barry Sloane, CEO of Newtek, stated, “This acquisition not only provides Newtek with a profitable revenue source, but also greatly enhances our ability to further one of our important strategic goals — to cross-market our existing menu of business and financial services to a large pre-existing customer base.”
Newtek Business Services, Inc. is a premier provider of business services and financial products to the small to medium-sized business market. Newtek’s core brands include: