EarthLink to Acquire New Edge Networks

EarthLink, Inc. (www.earthlink.com announced the execution of a definitive agreement to acquire New Edge Networks (www.newedgenetworks.com), a privately-held single-source national provider of private Virtual Private Networks (VPNs) and secure multi-site managed data networks and dedicated access for businesses and communications carriers.

The acquisition of New Edge Networks will enable EarthLink to easily and quickly expand its business in the fast growing small and medium business market. The Vancouver, Wash.-based company will give EarthLink one of the largest data communications networks in the country and a customer base that is expected to generate approximately $120 million in revenues in 2005.

Together, EarthLink and New Edge Networks will be able to package their voice, data, protection, and security tools to meet the rapidly growing demand for high-speed access and VPN services by both small office and home office (SOHO) users as well as small and medium enterprise (SME) customers.

“New Edge Networks is a tremendous growth platform for EarthLink to compete in the rapidly expanding SME networking market,” said Bill Heys, president of EarthLink’s value and small to medium enterprises business unit.

“When we bring together EarthLink’s financial resources and reputation for outstanding customer service with our national network and proven track record of performance, we will be uniquely positioned for serving our customers and tapping the growing market for business networks,” said Dan Moffat, president and CEO of New Edge Networks.

Under the terms of the agreement, EarthLink will acquire 100 percent of New Edge Networks in a merger transaction for approximately $144 million, consisting of 2.6 million shares of EarthLink common stock and $114.3 million in cash, including cash to be used to satisfy certain liabilities.

EarthLink plans to retain New Edge Networks’ 345 employees and the New Edge Networks brand and operate the company as a wholly-owned subsidiary of EarthLink. New Edge Networks will continue to be based in Vancouver, WA. With more than 20 years in the telecommunications industry, Dan Moffat will remain as president of New Edge Networks after the acquisition is completed.

New Edge Networks builds and manages broadband networks for businesses and communications carriers. Through its nationwide network of more than 850 switches and Internet routers, New Edge Networks uses various broadband access technologies for building business networks.