EarthLink to Acquire OneMain.com; EarthLink Announces a Stock Buy Back of 5 Million Shares; Top 10 ISP OneMain.com Adds Approximately 762,000 New Members to EarthLink
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ATLANTA--(BUSINESS WIRE)--June 8, 2000--EarthLink Inc.
(NASDAQ:ELNK), today strengthened its position as the nation's second
largest Internet Service Provider (ISP) by announcing a definitive
agreement to acquire OneMain.com (NASDAQ:ONEM), one of the country's
ten leading ISPs. On a combined basis, the two companies have more
than 4.2 million members. The transaction expands EarthLink's national
market coverage from major population centers into rural communities
and smaller cities where OneMain.com has focused its operations.
"Consistent with EarthLink's mission to become one of the world's
leading ISPs, the acquisition of OneMain.com strategically positions
EarthLink to capture market share in one of the fastest-growing
segments in the ISP marketplace -- rural America and smaller cities,"
said Garry Betty, CEO of EarthLink. "We see opportunity to leverage
our wide market presence, outstanding customer service and cost
structure to further drive member growth in rural communities and
secondary markets."
"OneMain.com is excited to join forces with the nation's second
largest ISP, as all key areas of our business will complement
EarthLink's strategic initiatives in its narrowband, broadband, Web
hosting and e-commerce and advertising business segments," commented
Steve Smith, chairman and CEO of OneMain. "With EarthLink's
substantial resources and national presence, we believe today's
announcement brings together two like-minded organizations focused on
delivering high levels of customer service and will enhance the online
experience of OneMain.com subscribers."
Terms of the Deal
EarthLink will purchase OneMain.com for cash and stock valued at
approximately $308 million, or approximately $12.27 per share for each
of OneMain.com's 25.1 million common shares outstanding. The purchase
price consists of approximately $150 million in cash and approximately
8.8 million shares of EarthLink common stock valued at $158 million at
the closing price of $17.94 on June 7, 2000.
The OneMain.com purchase includes a subscriber base of
approximately 730,000 narrowband accounts, 27,000 Web hosting
customers, and 5,000 broadband customers. On a combined basis,
EarthLink would be the nation's second largest Web hosting provider,
with 148,000 Web hosting accounts as of March 31, 2000.
The transaction is expected to close in the fourth quarter of
2000. With this transaction, EarthLink expects to end the year with
approximately 5 million members and annualized revenues of
approximately $1.3 billion.
EarthLink also announced today authorization from its board of
directors of a plan to repurchase up to five million shares of
EarthLink common stock through open market purchases.
About OneMain.com
Based in Reston, Va., OneMain.com is "your hometown Internet."
With more than 762,000 subscribers, OneMain.com is one of the largest
independent Internet service providers in the country. OneMain.com
provides Internet access, services and local content throughout the
United States to individuals and businesses predominantly located in
smaller metropolitan markets and rural communities. OneMain.com
believes these customers have traditionally been under-served by
national ISPs and that a great opportunity exists to meet the growing
demand for online services in these markets.
About EarthLink
EarthLink is one of the world's leading Internet service
providers, bringing the magic of the Internet to approximately 3.5
million individuals and businesses every day. With headquarters in
Atlanta, EarthLink provides a full range of innovative access, hosting
and e-commerce solutions to thousands of communities internationally
from more than 5,000 points of presence. EarthLink is committed to
doing an exceptional job of pleasing its customers, shareholders and
the community by following the company's Core Values and Beliefs.
Information about EarthLink and EarthLink Sprint services is available
by calling 800/395-8425 and through EarthLink's Web site at
www.earthlink.net.
OneMain.com Proxy Information
OneMain.com stockholders are urged to read the proxy statement
when it is filed with the Securities and Exchange Commission (SEC)
because it will contain important information pertaining to the
acquisition transaction. OneMain.com stockholders can retrieve the
proxy statement (which is filed with the S-4 Registration Statement),
after it is filed with the SEC, for free at the SEC's Web site at
www.sec.gov.
Certain of the statements contained in this release are
forward-looking statements (rather than historical facts) that are
subject to risks and uncertainties that could cause actual results to
differ materially from those described. With respect to such
forward-looking statements, the company seeks the protections afforded
by the Private Securities Litigation Reform Act of 1995. These risks
include, without limitation, (1) that the company will not retain or
grow its member base, (2) that the company will fail to be competitive
with existing and new competitors, (3) that the company will not be
able to sustain its current growth, (4) that the company will not
adequately respond to technological developments impacting the
Internet, (5) that needed financing will not be available to the
company if and as needed, and (6) that the company and its market
value will be adversely affected by general conditions in the equity
and other financial markets. This list is intended to identify certain
of the principal factors that could cause actual results to differ
materially from those described in the forward-looking statements
included elsewhere herein. These factors are not intended to represent
a complete list of all risks and uncertainties inherent in the
company's business, and should be read in conjunction with the more
detailed cautionary statements included elsewhere in the company's
most recent filings with the SEC.
CONTACT: EarthLink
Kirsten Hamling, 626/296-2467
kirstenk@corp.earthlink.net
or
OneMain.com
Dan Greenfield, 703/375-3016
daniel.greenfield@corp.onemain.com
or
Alexander Ogilvy
Jennifer Vincenzo, 404/881-2346
jvincenzo@alexanderogilvy.com
KEYWORD: GEORGIA VIRGINIA
INDUSTRY KEYWORD: E-COMMERCE INTERNET MERGERS/ACQ
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