FiberNet Acquires Gateway Colocation

• By theWHIR.com , January 06, 2004

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January 6, 2004 -- (WEB HOST INDUSTRY REVIEW) -- FiberNet Telecom Group, Inc. (ftgx.com) an operator of fiber optic networks that provide metropolitan connectivity to telecommunications service providers, said today that it has entered into a definitive agreement to acquire substantially all of the assets of Gateway Colocation (gatecolo.com), a New Jersey-based colocation facility.

Under the agreement, FiberNet will purchase Gateway Colocation for $170,000 in cash and 2.9 million shares of FiberNet's common stock, valued at approximately $3.8 million.

FiberNet said the acquisition is expected to close before January 31, 2004.

"This strategic acquisition expands our footprint in this key carrier hotel, where we already have a presence. We believe that there is an opportunity for FiberNet to fill the vacant colocation space in the facility with one or more customers seeking fully redundant space outside of New York City," said Michael S. Liss, president and chief executive officer of FiberNet. "Additionally, we intend to gain additional transport revenues from other customers of the facility and tenants of the building, leveraging the communications hub infrastructure that we are acquiring."

Gateway Colocation's facility measures 49,000 square feet and is occupied by over 25 carriers, Internet service providers and cable companies. FiberNet is already a customer of the facility.

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