EarthLink Completes Acquisition of New Edge Networks
Posted April 14, 2006
ATLANTA, GA. — EarthLink
(Nasdaq: ELNK) has wrapped up its acquisition of privately held New Edge Networks and is planning to pour money into its new subsidiary based in Vancouver WA.
Dan Moffat, who was president and chief executive officer of New Edge, told The Columbian newspaper in Vancouver that New Edge would soon hire 50 additional employees and increase its office space by one third to 90,000 square feet. He declined to say how much EarthLink was investing. Moffat will be president of the New Edge business unit.
The deal, which cost EarthLink $114.3 million in cash and 2.6 million shares of common stock, provides the Atlanta-based Internet Service Provider a national network for delivery of high-speed services such as virtual private networks.
Total value of the deal is about $144 million. The acquisition was announced in December.
New Edge will remain based in Vancouver. It has some 360 employees. The company was launched in 1999.
"This acquisition forms the nucleus for EarthLink's continued expansion into the fast growing business network market," said 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."
New Edge Networks has a network built around more than 850 switches and routers.