DJ Digital Island/Sandpiper -3: Will Pay $621M For Co.
Based on Friday's closing price, Digital Island will pay about $621 million in shares.
The merger of Digital Island and Sandpiper Networks confirms a report in Monday's The
Wall Street Journal, which reported the deal as worth $630.5 million.
Digital Island said holders of 50% of Sandpiper's shares and 45% of Digital Island's
shares have signed voting agreements in support of the merger.
Digital Island Chief Executive Ruann F. Ernst will remain in that post at the combined
company.
Sandpiper President Leo Spiegel will be president of the combined company, and Digital
Island's vice president, engineering and chief technology officer, Allan Leinwand, will
become vice president, internetwork engineering and chief technology officer.
Digital Island said operations of the merged company will include 1,200
enterprise-class servers.
Sandpiper is a content delivery service provider, offering a program that provides
management statistics for e-commerce Web sites.
Digital Island provides network services for e-commerce companies.
-Roy R. Reynolds; Dow Jones Newswires; 201-938-5400
(END) DOW JONES NEWS 10-25-99
07:53 AM
Digital Island and Sandpiper Networks Merge to Expand Services for Globalizing e-Business Applications
Industry Leaders Unite to Redefine Network Services for Deploying Successful
e-Business Worldwide
SAN FRANCISCO, Oct. 25 /PRNewswire/ -- Digital Island, Inc. (Nasdaq: ISLD), a leading
provider of network services for globalizing e-Business applications, announced today
that it has agreed to merge with Sandpiper Networks, Inc., the leading provider of
content delivery solutions for e-Business.
The combined company will integrate content delivery, hosting and intelligent network
services to address the two significant requirements of global e-Business applications:
support for centrally controlled and secure transactions and fast content delivery at the
edges of the network. In addition, the new entity will combine key intellectual property
from both companies including Digital Island's TraceWare(TM) software and Sandpiper
Networks' Footprint(SM) content delivery technologies to make Web experiences faster and
more locally relevant.
"Providing the best possible Web-site experience is critical to building and retaining
brand loyalty," said Ruann F. Ernst, President and CEO of Digital Island. "Together,
Digital Island and Sandpiper Networks will empower our customers to attract and grow
their revenues by delivering excellent end-user experiences -- anywhere, anytime."
"Digital Island and Sandpiper Networks share a common vision regarding the best
possible way to distribute computing intelligence around the world and deliver the right
experience to the ultimate user," said Leo Spiegel, President and CEO of Sandpiper
Networks. "Now, we can even more effectively fulfill our vision by combining our
world-class engineers, networks and technologies to better meet the needs of our global
customers."
Upon completion of the merger, Digital Island and Sandpiper's combined network will
include over 1,200 enterprise-class servers that directly serve 21 countries with a
network of five regional data centers to create the first complete solution for Web-based
marketing, sales, fulfillment and support applications worldwide. Digital Island and
Sandpiper Networks have already adopted the same industry-standard platforms for advanced
edge-network architectures. Both companies have in common Inktomi(R) caching and
mirroring software, enterprise servers from Sun Microsystems(R), Microsoft(R) and
RealNetworks(R) software for streaming audio and video services, and Vignette(R) for
publishing and content management applications.
The combined entity will have more than 100 customers including E*Trade, Cisco
Systems, Intuit, Novell, CNBC.com, Mastercard, Value America, Microsoft, and the Los
Angeles Times.
"The merger of Digital Island and Sandpiper Networks is truly significant for global
e-Business," said David Peterschmidt, President and CEO of Inktomi Corporation. "We
intend to work closely with the combined company to define the standards for improving
global Internet performance and to develop the next generation of network services."
"The merger of Digital Island and Sandpiper Networks raises the bar in the Internet
industry from both a business and technological perspective," said Christos M. Cotsakos,
Chairman, CEO and director of E*Trade Group, Inc. and a member of the board of directors
of Digital Island. "Each an innovator, they now have created a superb category of global
network services that brings together world-class resources for conducting business on
the Internet."
Pursuant to the terms of the merger, Sandpiper's shareholders will receive 1.07
shares of Digital Island for each Sandpiper share, warrant and option, or a total of
approximately 27 million shares on a fully converted basis of Digital Island. The merger
is subject to approval by shareholders of both parties and standard regulatory approvals.
Officers, directors and certain affiliates holding over 50% of the voting power of
Sandpiper Networks and 45% of the voting power of Digital Island have executed voting
agreements in support of the transaction.
Ruann F. Ernst, currently President and CEO of Digital Island, will assume the CEO
position in the combined company. Leo Spiegel, currently President and CEO of Sandpiper
Networks will become President. Allan Leinwand, Vice President Engineering/CTO of
Digital Island, will become Vice President of Internetwork Engineering and CTO.
Sandpiper Network Founders Dave Farber and Andrew Swart will assume the roles of Chief
Scientist and Vice President of Software Engineering, respectively. The combined company
will be headquartered in San Francisco and will have sales offices, regional data
centers, and operations facilities spanning eight countries.
Digital Island(R) is a leading provider of network services for globalizing e-Business
applications. Digital Island serves companies that need to securely and consistently
extend business-critical applications for marketing, selling, supporting, or distributing
products via the Internet. Digital Island e-Network Services include global content
distribution and hosting services, localization of the end user online experience and a
reliable global Intelligent Network, all of which are designed to deliver the right
content, to the right customer, in the right market, at the right time. The Company has
regional data centers in New York, Santa Clara, Honolulu, London and Hong Kong,
connecting directly into 21 countries with Local Content Managers in more than 13 markets
worldwide to provide the ubiquity and reach of the public Internet with the quality and
functionality normally available only in a corporate wide-area network.
www.digitalisland.net
Sandpiper Networks is the world's first Content Delivery service provider for the
Internet. Founded in 1996, Sandpiper Networks has built what it believes to be the
largest and most comprehensive Content Delivery Network (CDN). The company's initial
service offering, FootprintSM , gives leading e-Businesses the power to deliver Web sites
more effectively and profitably while significantly improving site performance.
Footprint is designed to ensure the delivery of fresh Web content of all types while
providing management statistics that are vital to Web-centric businesses.
www.sandpiper.net
Completion of the merger is subject to customary conditions, including stockholder
approvals and antitrust review.
Important Notice
DIGITAL ISLAND is a registered trademark of Digital Island, Inc. All other trademarks
are properties of their respective owners.
This release may contain forward-looking statements that involve risks and
uncertainties. Important factors which could cause actual results to differ materially
from those in the forward-looking statements, include but are not limited to: the
companies' short operating history which makes it difficult to predict its future results
of operations; each company's history of operating losses and expected future losses
which could impede its or their combined ability to address the risks and difficulties
encountered by companies in new and rapidly evolving markets; each company's future
operating results could fluctuate which may cause volatility or a decline in the price of
the Digital Island's stock; each company may not be able to price its services above the
overall cost of bandwidth causing its financial results to suffer; common or unforeseen
difficulties in completing the merge or in integrating the combined companies'
management, personnel, operations and businesses; and other factors detailed in Digital
Island's filings with the Securities and Exchange Commission including its recent filing
on Form S-1.
/CONTACT: Irwin Greenstein of Digital Island, 415-738-4162, or
irwin@digitalisland.net; or Kate Rajeck or Christine Belonogoff, both of The Financial
Relations Board, 415-986-1591, or krajeck@frb.bsmsg.com, for Digital Island; or Michelle
Balconi of The Townsend Agency, 858-457-4888, ext. 132, or mbalconi@townsendagency.com,
for Sandpiper Networks/
06:59 EDT |
