MegaPath Inc., the leading provider of Virtual Private Network (VPN) solutions and other managed IP services to businesses nationwide, announced that it has made a strategic investment in DSL.net, Inc. (OTCBB: DSLN) which will allow MegaPath to acquire substantially all of the equity of DSL.net upon receiving regulatory and shareholder approval. This acquisition, which involves additional funding from existing MegaPath investors, would further strengthen the Company’s market position and enable it to deliver a wider selection of managed IP (Internet Protocol) data, voice and security services. The addition of DSL.net’s broadband and Voice over IP (VoIP) infrastructure would also give MegaPath greater control over the performance and reliability of its services, and improve its margins and profitability.
“This strategic investment gives us the opportunity to accelerate MegaPath’s growth and improve its profitability, while also providing us with greater control over the quality of service we offer our customers,” said Craig Young, Chairman and Chief Executive Officer of MegaPath. “We are eager to help DSL.net customers grow their businesses by leveraging our wide array of managed IP services, expanded network reach, and additional operational and engineering resources. Moreover, the combined company would offer the financial strength and market leadership that enterprise customers look for when selecting a service provider to manage their business-critical communications.”
As the leading IP Managed Service Provider (MSP) in North America, MegaPath can offer DSL.net customers expanded broadband coverage throughout the U.S. and Canada. MegaPath can also provide a full range of integrated security, IP Telephony, remote access and site-to-site IP VPN services to augment the DSL.net services. This acquisition would give MegaPath the broadband facilities and field technicians to deliver these services throughout the Northeast and Mid-Atlantic regions, which have the highest concentration of businesses in the United States. This additional infrastructure should improve MegaPath’s profit margins and provide greater control over its costs and service delivery.
“DSL.net is known for offering its broadband customers among the highest performance and reliability in the industry, combined with highly innovative service offerings that increase productivity and business profitability,” said David Struwas, Chief Executive Officer of DSL.net. “By combining the companies’ infrastructure and service offerings, we will be providing customers one of the best networks and the most comprehensive set of managed IP services available anywhere. This is great news for both companies and our customers.”
DSL.net currently offers services via its own facilities in over 350 collocations in Vermont, New Hampshire, Massachusetts, Connecticut, Pennsylvania, Rhode Island, New York, New Jersey, Delaware, Maryland, Virginia and Washington, D.C.
The associated round of funding includes certain of MegaPath’s existing investors, including Fidelity Ventures, Rho Ventures, U.S. Venture Partners, Columbia Capital, Trident Capital and Boston Millennia Partners. MegaPath will use this funding to accelerate the growth of its managed IP service business and expand its portfolio of value-added services organically and through strategic acquisitions. The acquisition is subject to shareholder and regulatory approval; final closing is expected by the end of 2006, however, this date is subject to change.
MegaPath is the leading provider of managed IP communications services in North America. MegaPath leverages its wide selection of broadband connectivity, Virtual Private Networks, Voice over IP (VoIP) and security technologies to enable businesses to lower costs, increase security and enhance productivity. Businesses of all sizes can easily and securely communicate between their headquarters, branch offices, retail locations, mobile workers, and business partners.
To learn more about why over 18,000 companies have chosen MegaPath’s managed IP data, voice and security services to improve their business communications, visit www.megapath.com or call 1-877-MegaPath (638-4342).
DSL.net, Inc. is a leading nationwide provider of broadband communications services to businesses. The Company combines its own facilities, nationwide network infrastructure and Internet Service Provider (ISP) capabilities to provide high-speed Internet access, private network solutions and value-added services directly to small- and medium-sized businesses or larger enterprises looking to connect multiple locations. DSL.net product offerings include T1, DS3 and business-class DSL services, virtual private networks (VPNs), frame relay, Web hosting, DNS management, enhanced e-mail, online data backup and recovery services, firewalls and nationwide dial-up services, as well as integrated voice and data offerings in select markets. For more information, visit www.dsl.net, www.getduet.com, e-mail firstname.lastname@example.org, or call 1-877-DSL-NET1 (1-877- 375-6381).