EarthLink to Acquire New Edge Networks
EarthLink to Acquire New Edge Networks
Deal Gives EarthLink Growth Platform for SME customers
12/13/2005 7:00:48 AM
ATLANTA and VANCOUVER, Wash., Dec 13, 2005 /PRNewswire-FirstCall via
COMTEX/ -- EarthLink, Inc. (ELNK), the nation's next generation Internet
service provider (ISP), today announced the execution of a definitive
agreement to acquire New Edge Networks, 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 easily and
quickly expand its business in the fast growing small and medium business
market. The Vancouver, Wash.-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.
"New Edge Networks is a tremendous growth platform for EarthLink to compete
in the rapidly expanding SME networking market," said Bill Heys, president
of EarthLink's value and small to medium enterprises business unit. "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."
"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," said Dan
Moffat, president and CEO of New Edge 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, Wash.
With more than 20 years in the telecommunications industry, Dan Moffat will
remain as president of New Edge Networks after the acquisition is completed.
Conference Call for Analysts and Investors
Investors in the U.S. and Canada interested in participating in the conference call on December 13, 2005 at 10:00 a.m. Eastern Standard Time (EST) may dial 1-800-706-0730 and reference the EarthLink call. Other international investors may dial 1-706-634-5173 and also reference the EarthLink call.
EarthLink recommends dialing into the call approximately 10 minutes prior to the scheduled start time.
EarthLink will use a PowerPoint presentation during this call. This presentation can be viewed by following this link : Earthlink Presentation
A replay of the PowerPoint presentation with audio will be available on our website beginning at 12:30 p.m. EST on December 13, 2005 through midnight on December 20, 2005 by dialing 1-800-642-1687. International callers should dial 1-706-645-9291. The replay confirmation code is 3375230.
A replay of the powerpoint presentation with audio will be available on our website at beginning at 12:30 p.m. EST on December 13, 2005 through midnight on December 20, 2005 located at: http://phx.corporate-ir.net/phoenix.zhtml?c=77594&p=irol-audioArchives.
