Sitestar Buys USA Telephone Assets

• By theWHIR.com , May 12, 2008

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May 12, 2008 -- (WEB HOST INDUSTRY REVIEW) -- Web hosting provider Sitestar (sitestar.com) announced on Monday it has purchased an undisclosed number of DSL accounts and related assets from USA Telephone (usacsp.com). According to the press release, this is Sitestar's second transaction with the company.

Last November, Sitestar closed a "blockbuster deal" with the Maine-based competitive local exchange carrier in which it acquired nearly 40,000 dial-up subscribers sold and marketed under the Nationwide Internet, InReach Internet and DFW Internet brands.

The largest deal in Sitestar history, the acquisition reportedly doubled the company's revenue and helped expand the company through additional customer acquisitions and develop new-growth initiatives in web hosting services and voice over Internet protocol.

Sitestar has been actively pursuing acquisitions in 2008 as well, having most recently purchased the Internet access customer base and assets of N2 The Net in April and Internet service and hosting provider Comcation in late February.

Sitestar says this particular transaction with USA Telephone increases its broadband base and supports the company's strategy of diversifying its customer portfolio to facilitate sustained revenue growth.

"We are delighted that we could leverage our existing business relationship with USA Telephone to acquire additional customers," says Frank R. Erhartic Jr., CEO of Sitestar. "Sitestar has earned a reputation of being able to successfully acquire, integrate and support a myriad of ISP access and web hosting customers. DSL service is typically more immune to churn than dial-up and, for this customer base, we can achieve very attractive margins by utilizing our existing infrastructure and favorable supplier partnerships."

The company says it anticipates this year to be one of "increased deal flow and growth in new, opportunistic market segments," and is reportedly pursuing a number of similar acquisitions in 2008.

Headquartered in Lynchburg, Virginia, Sitestar says it offers business-grade Internet access, Web hosting and other Internet related products. The company operates from multiple sites and provides services to customers throughout the US and Canada.

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