Jun 14, 2003 : Hostway Buys NetNation in $10M Deal

📅 June 14, 2003 - Vancouver-based Web hosting firm NetNation Communications (netnation.com 👉 Total Reviews: 3
🙌 Average Rating: 2 / 10
👍 Good Reviews: 0
👎 Bad Reviews: 3
👈 Official Responses: 0 -> hostway.com) said late yesterday itplanned to merge with Hostway (hostway.com 👉 Total Reviews: 19
🙌 Average Rating: 2.5 / 10
👍 Good Reviews: 3
👎 Bad Reviews: 16
👈 Official Responses: 0) in a cash deal valued at $10million.

Chicago-based Hostway has been aggressively expanding its operations overthe past three years. The company has operations in the United States,United Kingdom, the Netherlands, Asia and Australia while operating datacenters in Chicago, London and Seoul, Korea. It was not immediately clear ifNetNation's data center, which is located in downtown Vancouver, would beconsolidated.
According to Hostway, the deal is a "decisive" moment in its expansionstrategy, which now includes six international "hosting centers." Founded in1996, Hostway currently hosts more than 100,000 sites, a number which willincrease upon the completion of its acquisition of NetNation; according toits most recent annual report, NetNation hosted 23,000 sites in 120countries as of December 2002, and employed a staff of more than 70.NetNation also operates DomainPeople, an ICANN-accredited registrar that hasregistered more than 300,000 domain names worldwide.
"NetNation is a solid Web hosting company with a proven track record withclients worldwide," said Lucas Roh, CEO of Hostway. "The combination of ourtwo complementary organizations has the clear strategic benefits ofincreased scale and new growth opportunities."
The announcement comes on the heels of a planned one-for-2.5 stock splitaimed at keeping NetNation in compliance with the Nasdaq's $1.00 minimum bidprice. According to the companies, the deal is calculated and based onNetNation's pre-consolidated share price and number of outstanding shares.Under the terms of the agreement, NetNation shareholders will receive thepre-consolidated price of $0.66 per share. Pre-consolidated NetNation sharesclosed at 51 cents per share Friday afternoon, and the company's sharesbegin trading on a post-consolidation basis Monday.
"We are very pleased to enter into this merger agreement with Hostway, anorganization recognized for its commitment to customer service, and qualityproducts and services," said David Talmor, President and Chairman ofNetNation. "The proposed merger provides Hostway and NetNation customerswith truly global reach in six centers around the world, and the combinedstrengths of both companies will benefit our customers through serviceinnovations and even better customer service."
NetNation said it expects the transaction to close in September.