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CommentsPeer 1 Network Enterprises, Inc. (www.peer1.net), a provider of high performance Internet infrastructure, announced today that it has purchased the dedicated server assets of Interland, Inc., a leading provider of Web sites and online services for small and medium-sized businesses for a purchase price of US$14 million. The assets acquired include data centers in Atlanta, Georgia; Fremont, California; and Miami, Florida, totaling over 115,000 square feet and approximately 8,300 dedicated servers.
C. Geoffrey Hampson, president and chief executive officer of Peer 1, anticipates that all of Peer 1’s business units will benefit significantly from the acquisition.
“The accretive acquisition of Interland’s dedicated server assets is a key strategic element in the evolution of Peer 1 Network,” he said. “This transaction adds a large customer base, skilled staff, solid dedicated server equipment and three data centers to Peer 1 Network’s existing infrastructure. Add that to Peer 1’s specialization in customer service and high performance network, and the innovation of our subsidiary ServerBeach Ltd, and you have an outstanding fit.”
According to Tier 1 Research’s February, 2005 “Internet Infrastructure Services” report, colocation revenues rose 6% year over year in the fourth quarter of 2004, and dedicated standardized hosting experienced an average of 25% increase in revenues over the same time period. “Peer 1 Network has been aggressively pursuing acquisition opportunities for over a year,” continued Hampson.
In connection with the acquisition, the Company has completed three financing transactions. Firstly, the Company has entered into an agreement with a lender who has provided a senior long term facility of up to US$28 million, of which US$24 million was drawn down upon completion of the acquisition.
Second, the Company’s subsidiary, Peer 1 Network (USA) Inc. (“Peer 1 USA”) has issued 7000 shares of Series A Preferred stock at a price per share of US$1,000, for aggregate proceeds of US$7,000,000. Celerity Partners, of Menlo Park, California, acquired $4 Million and insiders of the Company acquired an additional US$2,620,000 of the Series A Preferred stock.
Third, the Company has converted approximately CDN$7,023,000 of its aggregate indebtedness into approximately 25,309,000 common shares of the Company, at a price per share of CDN$$0.2775. This indebtedness was held by insiders of the Company.
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