April 18, 2006 -- (WEB HOST INDUSTRY REVIEW) -- Internet service provider EarthLink (earthlink.com) announced on Monday that it has completed its acquisition of virtual private network provider New Edge Networks, securing multi-site managed data networks and dedicated Internet access for businesses and communications carriers.
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Under the terms of the merger agreement, EarthLink has acquired 100 percent of New Edge Networks for 2.6 million shares of EarthLink common stock and $114.3 million in cash, including cash to be used to satisfy certain liabilities.
"This acquisition forms the nucleus for EarthLink's continued expansion into the fast growing business network market," says Bill Heys, president of EarthLink's value and small to medium enterprises business unit. "We believe that New Edge Networks' national coverage called 'BigFoot,' proprietary systems, and practical know-how are strong competitive advantages."
Additionally, EarthLink was required to grant options to purchase up to 657,000 shares of its common stock to New Edge Networks employees. These options are "inducement grants" to new employees in connection with EarthLink's acquisition of New Edge Networks that qualify under the "inducement grant exception" to the shareholder approval requirement of NASD Marketplace Rule 4350(i)(1)(A).
