Verio Inc, the Englewood, Colorado internet services company that’s been on a buying spree since its very inception, has bought its second web hosting concern in less than a month. Now Verio is snapping up Boca Raton, Florida-based Hiway Technologies Inc for nearly $330m and claims the deal essentially creates the world’s largest and fastest-growing domain-based web hosting company, with over 150,000 sites. Terms of the deal call for Verio to hand over $2.82 in cash and 0.2042 shares of Verio common stock in exchange for each HiWay share. Based on those ratios, total consideration will amount to $101m in cash and roughly 8.67 million Verio shares. Based on Verio’s $26.375 share price before the announcement, the stock changing hands would be worth about $228.7m. As with the acquisition of TabNet Inc earlier this month (CI No 3,447), the HiWay buy not only adds hosted web sites (90,000 to the existing 60,000) but adds to Verio’s roster of preferential marketing agreements with high- profile internet portals and telecom companies. HiWay is said to have OEM deals with several Regional Bell Operating Companies, but a spokesperson declined to name them. The acquisition also adds over 2,000 resellers through HiWay’s wholly-owned RapidSite Inc subsidiary, enabling Verio to market its web services through more than 4,000 resellers in the US and in over 100 countries worldwide. HiWay showed second-quarter revenue of $9.7m, with operating income of $1.4m. The transaction is expected to close in the fourth quarter and Verio expects to incur about $6m in expenses associated with the deal over the next three quarters through mid-1999, but also reckons that thereafter the combined companies should see savings of about $5m a year.
