The value of the deal is up from the estimated $6.8m US LEC reported in November. The assets include the company’s broadband and dial-up Internet access, co-location and managed-hosting units, as well as two data centers in Pennsylvania. However, Fastnet’s web-development and wireless-access businesses were not included in the deal.
Fastnet filed for Chapter 11 bankruptcy protection in June 2003, only two weeks after closing a deal to buy assets of another bankrupt ISP, AppliedTheory Corp. That acquisition, its fifth in the past two years, was expected to add $15m to its annual revenue.
Founded in 1994, Fastnet operated a network in the Boston to Washington corridor. However, it has lost money every year of its existence, including $16.6m in 2002 and $23.6m in the first six months of this year. The stock of the Hanover Township, Illinois-based company was de-listed earlier this year by Nasdaq.
US LEC’s bid, funded by a $10m private placement, includes $6m in cash, $1m of US LEC stock, and a $1.5m note, along with the assumption of some liabilities. The Charlotte, North Carolina-based carrier has indicated that most of Fastnet’s 100 employees will keep their jobs. US LEC itself employs about 900 people, and provides voice, data and Internet services in 14 states.
US LEC says the acquisition will boost its annual revenue by $24m. It will also gain 2,100 business customers with dedicated internet or data center services, as well as 26,000 web hosting and dial-up internet customers. The acquisition is expected to close this month.
This article is based on material originally produced by ComputerWire.
