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Andover, Massachusetts - (Website Hosting Directory) - September 18, 2007 - NaviSite application solutions, hosting and content delivery services firm, has agreed to acquire netASPx.
The definitive merger agreement will add Lawson and Kronos to NaviSite's services, for its Oracle and Microsoft application management portfolio.
The privately-owned applications management service provider will be sold for $40.5 million, consists of approximately $15.5 million in cash and $25.0 million in Convertible Preferred Stock.
Headquartered in Herndon, VA, netASPx is a provider of applications management services with a focus on Lawson Enterprise Resource Planning (ERP) and Kronos Workforce Management and Business Intelligence Applications. In addition, netASPx maintains the infrastructure necessary to support these applications within its 18,000 square foot data center in Minneapolis.
The acquisition brings Lawson and Kronos solutions to NaviSite and broadens its existing portfolio of applications management expertise, which already includes the Oracle product family (Oracle E-Business, PeopleSoft, Siebel, JD Edwards and Fusion), Microsoft Dynamics, and Exchange. By acquiring netASPx, NaviSite also expands its customer base, creating new up-sell and cross-sell opportunities for both its current clients and those of netASPx. Finally, the addition of the netASPx data center in Minneapolis bolsters NaviSite's presence in the Midwest with significant available capacity.
Arthur Becker, Chief Executive Officer of NaviSite offered, ''Priced at better than five times expected synergistic annual EBITDA and two times the recorded application management revenues, we are pleased with the addition of this fine company, its talented professionals and capabilities to our portfolio. NetASPx will contribute Lawson and Kronos expertise and customers that will significantly enhance our market position as a leading provider of application management services. The netASPx monthly ARPU (Average Revenue Per User) of approximately $19,000 and revenue per square foot of over $8,000 illustrate the value being provided to their customers. We also expect that the current NaviSite portfolio of application and hosting related competencies will offer new service opportunities to these new customers.''
The acquisition was financed through a $20 million addition to NaviSite's current Senior Term Facility and the issuance of $25.0 million of Series A Convertible Preferred Stock. The Senior Term loan interest rate has been reset to LIBOR plus 4%. The Convertible Preferred is redeemable, has an 8% PIK (non cash) coupon that increases to 12% on the 18 month anniversary of the closing date and is convertible at the price of $8.00 per share 18 months from the closing date. The company plans to update its Fiscal 2008 guidance when it reports fourth quarter and full year 2007 results on September 25, 2007.
Headquartered in Herndon, Virginia, netASPx is a provider of Managed Application Services, or ''MAS'' and focuses on Enterprise Resource Planning (Lawson) and Work Force Management (Kronos) solutions that automate critical business functions for mid-market companies. The company maintains the facilities and infrastructure necessary to support customer back-office applications, including Finance, Human Resources, Accounting, Payroll and Supply Chain Management, using primarily Kronos and Lawson Software.
NaviSite's Internet solutions, from colocation and web hosting to managed services and application management, are designed to service mid-market organizations, with a virtual server platform specifically designed to deliver a high-performance, flexible IT environment that rapidly scales. NaviSite is a provider of application solutions, hosting and content delivery services, with over 950 customers in 14 data centers; offices in the US, UK and India. NaviSite outsources enterprise applications and related technology services to drive IT Efficiency and Effectiveness. NaviSite delivers application implementation and management, hosting and content delivery services, along with complex application and IT services for mid sized companies.
To learn more about netASPx, please visit: www.netaspx.com.
For more information about NaviSite, please visit: www.navisite.com.
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