CMGI, NaviSite and AltaVista Agree with Compaq To Restructure Key Financial Obligations
ANDOVER, Mass.--(BUSINESS WIRE)--Oct. 30, 2001--CMGI, Inc. (Nasdaq: CMGI), and majority-owned subsidiaries AltaVista Company and NaviSite, Inc. (Nasdaq: NAVI), today announced the signing of an agreement with Compaq Computer Corporation and Compaq Financial Services (CFS, a wholly owned subsidiary of Compaq) to retire, restructure and realign key financial obligations.
As part of the financial restructuring between the companies, Compaq will retire two CMGI promissory notes, representing total outstanding amounts of $220 million, issued by CMGI in 1999 related to the company's acquisition of AltaVista. In exchange, CMGI will transfer to Compaq a combination of cash, CMGI common stock and CMGI's interest in B2E Solutions LLC, a joint enterprise formed by Compaq and CMGI last year. The agreement also terminates AltaVista's existing equipment leases with Compaq Financial Services, effectively freeing AltaVista from the remainder of future lease obligations in exchange for a one-time payment.
Additionally, CFS and CMGI will provide NaviSite with debt financing and CFS will restructure certain outstanding lease obligations. CMGI will also convert all of its outstanding notes and obligations into NaviSite common stock.
"We are extremely pleased with this agreement. Importantly, the restructured terms allow CMGI to refocus critical financial resources on building our future business and achieving our overall target of reaching recurring operating profitability by Q4 of our current fiscal year," said David Wetherell, chairman and chief executive officer, CMGI, Inc.
"This agreement strengthens NaviSite's financial position, accelerates our path to profitability and solidifies our position within the Enterprise services market. We are focused on delivering operational excellence and high value-added solutions to our customers operating mission critical web applications. The economics of outsourcing are powerful, we're seeing continued demand for our services and we believe this agreement strengthens our ability to establish leadership in an emerging market," said Tricia Gilligan, acting CEO of NaviSite.
Additional details of the agreement can be found in the CMGI Form 8-K and NaviSite Form 10-K filed on October 30, 2001.
About CMGI and @Ventures
CMGI, Inc. (Nasdaq: CMGI), a leading global Internet operating and development company, is comprised of established and emerging companies, including both CMGI operating businesses and investments made through its venture capital affiliate, @Ventures. CMGI companies span a range of vertical market segments including search and portals; infrastructure and enabling technologies; e-business and fulfillment; interactive marketing; and Internet professional services. Compaq, Pacific Century CyberWorks and Sumitomo hold minority positions in CMGI.
CMGI's majority-owned operating companies include Engage (Nasdaq: ENGA), NaviSite (Nasdaq: NAVI), AltaVista, CMGion, Equilibrium, MyWay.com, SalesLink, Tallan, uBid and yesmail.com. @Ventures has ownership interests in more than 40 companies, with a focus on identifying, investing in and developing emerging technology companies and eBusinesses.
CMGI's corporate headquarters is located at 100 Brickstone Square, Andover, MA 01810. @Ventures has offices there, as well as at 3000 Alpine Road, Menlo Park, CA 94028. For additional information, see cmgi.com and ventures.com.
About NaviSite, Inc.
NaviSite, Inc., is a leading provider of outsourced Web hosting and managed application services for companies conducting mission-critical business on the Internet, including enterprises and other businesses deploying Internet applications. The Company's goal is to help customers focus on their core competencies by outsourcing the management and hosting of their Web operations and applications, allowing customers to fundamentally improve the ROI of their web operations. NaviSite is a majority-owned operating company of CMGI, Inc. with minority investment from Microsoft Corporation.
NaviSite's SiteHarbor(R) solutions provide secure, reliable, co-location and high-performance hosting services, including high-performance Internet access, and high-availability server management solutions through load balancing, clustering, mirroring and storage services. In addition, NaviSite's enhanced management services, beyond basic co-location and hosting, are designed to meet the expanding needs of businesses as their Web sites and Internet applications become more complex and as their needs for outsourcing all aspects of their online businesses intensify. The Company's application services, which include application hosting, management and rental, provide cost-effective access to, as well as rapid deployment and reliable operation of, business-critical applications, including managed services for streaming media. For more information about NaviSite, please visit www.navisite.com or by phone on the East Coast call 888-298-8222, on the West Coast call 888-755-5525. NaviSite is headquartered at 400 Minuteman Road, Andover, MA 01810.
This release contains forward-looking statements which address a variety of subjects including, for example, the expected benefits of the agreement with Compaq to restructure certain financial obligations of CMGI and its subsidiaries and NaviSite, and the expected ability of CMGI and its subsidiaries and NaviSite to reach profitability. The following important factors and uncertainties, among others, could cause actual results to differ materially from those described in these forward-looking statements: The parties may not be successful in closing the transactions contemplated by the restructuring agreement, or the transactions may not provide the expected benefits to CMGI and its subsidiaries and NaviSite; CMGI's and NaviSite's success, including their respective ability to decrease their cash burn rates, improve their cash positions and revenue run rates and reach profitability, depends on their ability to execute on their respective business strategies and the continued and increased demand for and market acceptance of CMGI's and NaviSite's products and services and the Internet in general; CMGI and NaviSite may experience difficulties integrating technologies, operations and personnel in accordance with their business strategies; and increased competition and technological changes in the markets in which CMGI and NaviSite compete. For a detailed discussion of cautionary statements that may affect CMGI's and NaviSite's future results of operations and financial results, please refer to CMGI's and NaviSite's respective filings with the Securities and Exchange Commission, including CMGI's Annual Report on Form 10-K filed October 29, 2001 and NaviSite's Annual Report on Form 10-K filed October 30, 2001.
CONTACT: John Stevens
CMGI Corporate Communications
(978) 684-3060
jstevens@cmgi.com
or
Catherine Taylor
CMGI Investor Relations
(978) 684-3832
ctaylor@cmgi.com
or
Brenda Suarez
NaviSite Investor Relations
(978) 946-8643
bsuarez@navisite.com |
