DSLN,
PRESS RELEASE:DSL.net Inc. Secures $15M Investment >DSLN
12/26/2001
Dow Jones News Services
(Copyright © 2001 Dow Jones & Company, Inc.)
( BW)(CT-DSL.NET)(DSLN) DSL.net Secures New $15 Million Investment; Additional Investment from New Syndicate Positions Company to Accelerate Smart Growth Strategy
Business Editors
NEW HAVEN, Conn.--(BUSINESS WIRE)--Dec. 26, 2001--DSL.net, Inc. (NASDAQ: DSLN), a leading, nationwide, direct provider of high-speed Internet access solutions for small and medium-sized businesses, today announced that a consortium of investors, led by Columbia Capital, and including Charles River Ventures, Hunt Private Equity Group, and National Investors Group, has agreed to invest $15 million in DSL.net convertible redeemable preferred stock.
The new investment, which has been approved by the DSL.net board of directors, is in addition to a previously announced $15-20 million financing from VantagePoint Venture Partners. The combined $30-35 million investment will position the company to accelerate its growth plans and is still expected to fund the company through cash flow positive, based on the company's current plans and projections.
The new investment transaction is contingent upon stockholder and regulatory approvals, which are currently expected to occur in the first quarter of 2002. The company and the new investors have received proxies that they believe will be sufficient to approve the transaction. An initial closing is expected to occur by the end of 2001, at which the company is expected to receive $10 million through a combination of the sale of convertible redeemable preferred stock and a bridge loan, which the company plans to repay with the proceeds from the sale of preferred stock to the new investors upon receipt of stockholder approval. The remaining $5 million investment is scheduled to close upon receipt of stockholder approval and completion of the VantagePoint financing.
"Being able to secure this level of new investment from leading firms such as Columbia Capital, Charles River Ventures, Hunt Private Equity Group, and National Investors Group in an extremely tight capital market, is a strong expression of confidence in our unique business model," said David F. Struwas, chairman and chief executive officer of DSL.net. "With this new infusion of capital, we are positioned to accelerate our smart growth strategy both through potential acquisitions and through the ramp-up of our internal sales efforts."
Harry Hopper, managing partner of Columbia Capital, a private investment firm with more than $1.4 billion under management, commented, "Columbia Capital, and the members of our syndicate, were impressed with DSL.net's unique business model, experienced management team and its ability to execute quarter after quarter. We are confident that the new dollars will be used effectively to capitalize on the significant growth opportunities that exist for well funded companies in today's business broadband arena."
Keith Markley, president and chief operating officer of DSL.net added, "The VantagePoint Venture Partners financing that we announced earlier this year allowed us to implement a plan that is expected to bring DSL.net to cash flow positive next year. While we are still focused on achieving positive cash flow in 2002, this new funding allows us to steam ahead on our growth plans. We are very exciting about cranking up our smart growth engine again." |
