The acquisition concludes months of negotiations, and brings together a company with a considerably broader array of services than either company possessed previously. According to John Lee, VP of global marketing for Hostway, the combined company is among the largest shared hosting providers in the world, measured by customers and revenue.

Lee said Hostway would not be disclosing how much it paid for Affinity for the time being.

The combined company will serve a total of 600,000 customers, with a presence in 11 countries and 15 operation centers worldwide. The new company will be led by Hostway's current CEO, Lucas Roh.

"Our first and main focus through this acquisition has been to ensure that customers of both company's do not experience any disruption in current services and in fact bolster it further," says, Roh. "By joining forces, we have an increased global scale, scope, human capital and financial strength to continue to deliver superior service levels and innovative products, which Hostway and Affinity have both built valuable brands and reputations on."

Hostway says the acquisition will enable the companies to build from a position of strength with both end users and channel partners. Prior to the acquisition, both companies served similar market segments with similar product lines.

"Both parties are confident that this acquisition will generate benefits for our customers and partners.  Hostway brings research and development power to build and deploy compelling and differentiated services, while Affinity has been guiding small businesses to web success with cutting edge services for over 10 years," said Jim Collins, CEO of Affinity Internet.  "By combining our exceptional, proprietary solutions we are able to provide an offering unlike anything currently in the market.  In all cases, our customers will be positively impacted by this acquisition - by gaining a new unparalleled power for their online presence."

According to Hostway's Lee, the Affinity brand, and the Gate.com and ValueWeb brands it owns, will continue to operate as separate brands while the company evaluates whether combining any of the products might be to its benefit.

"As the Internet Infrastructure Services industry approaches $15 billion globally in 2007 with annual growth still above double digit rates, it's obvious that consumers and businesses alike continue pioneering value online," said Andrew Schroepfer, founder of Tier1 Research (T1R.com). "Hostway's long track record of successful M&A on a global basis will greatly benefit from additional scale brought by Affinity's client base and robust service portfolio, which makes this a strategic transaction in the industry. Both Hostway and Affinity come from positions of strength in their respective market segments, which together makes for an even stronger industry leader."