By Steve Gelsi, CBS MarketWatch
Last Update: 9:37 AM ET Oct 25, 1999 NewsWatch
SAN FRANCISCO (CBS.MW) -- Digital Island said Monday it's buying privately-held Sandpiper Networks in a stock deal worth about $621 million.
Digital Island (ISLD: news, msgs) and Sandpiper plan to "integrate content delivery, hosting and intelligent network services" aimed at a global e-business applications.
Shares of Digital Island added 6 1/4 to 29 1/4 on Monday morning.
Sandpiper's shareholders will receive 1.07 shares of Digital Island for each Sandpiper share or a total of about 27 million shares of Digital Island. The merger is subject to approval by shareholders of both companies.
The deal comes on the heels of an explosion in networking stocks such as Foundry Networks (FDRY: news, msgs), and Sycamore Networks (SCMR: news, msgs), which debuted with a 387 percent jump in its initial public offering on Friday. See IPO Daily Report.
The coupling also challenges another red-hot initial public offering expected this week from networker Akamai Technoloiges (AKAM: news, msgs).
The merged firm will combined Digital Island's TraceWare software and Sandpiper Networks' Footprint products to speed up Internet content delivery.
Digital Island Chief Executive Ruann F. Ernst will head up the combined company.
Digital Island and Sandpiper's combined network will include
more than 1,200 Web servers feeding 21 countries with a network of five
regional data centers.
It'll "create the first complete solution for Web-based marketing, sales,
fulfillment and support applications worldwide," the companies said.
The 100 customers in the combined company will include E Trade, Cisco Systems, Intuit, Novell, CNBC.com, Mastercard, Value America, Microsoft, and the Los Angeles Times.
Leo Spiegel, currently president and chief executive of Sandpiper Networks will become President.
The combined company will be headquartered in San Francisco and will have sales offices, regional data centers, and operations facilities spanning
eight countries.
I believe you are right. I'm adding more as I type.
Greg |
