Message 11695948
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. |
