[Winstar and WAM!NET Enter Into Strategic Agreements]
NEW YORK--(BUSINESS WIRE)--Jan. 10, 2000--
WAM!NET Receives $50 Million Investment from Winstar, Gains Access to Winstar's Network and Sales Force; Companies Agree to Approximately $250 Million, 20-Year Network Contract
WINSTAR COMMUNICATIONS, INC. (NASDAQ:WCII) and WAM!NET Inc. today announced they have entered into several strategic agreements whereby:
- Winstar will invest $50 million in WAM!NET and has acquired an option to invest up to an additional $50 million;
- WAM!NET will purchase network facilities over 20 years from Winstar for approximately $250 million;
- Winstar and WAM!NET also will cross-market one another's products and services. Winstar has made a $12.5 million, five-year revenue commitment to sell WAM!NET services.
In addition, the two companies also have agreed to work together to jointly develop and market new products and services for vertical industries that have a need for high-speed broadband communications and WAM!NET's unique portfolio of business-to-business e-services.
WAM!NET Inc., with its industry smart business-to-business e-services, is a leading global digital data management services company that helps customers leverage the Internet to convert their analog workflow to digital workflow. The company provides workflow solutions for the media market -- those that create and produce media, such as in the printing, publishing, corporate advertising, retailing, broadcast, film, and entertainment industries. WAM!NET customers have large, mission-critical digital files that require high-speed broadband connections and reliable delivery. Among WAM!NET's growing customer base are Time, Inc.; R.R. Donnelley & Sons Co.; Sears, Roebuck & Co.; Wal-Mart Stores, Inc.; Ford Motor Company; and Merck & Co., Inc.
"This strategic agreement with WAM!NET is another example of how Winstar -- through its end-to-end broadband network and a wide range of data and Internet services -- is fast becoming the leader in providing network infrastructure for high-tech companies with complex networking needs," said Bob McGuire, president and chief operating officer of Winstar's Large Accounts business unit. "We're excited about the investment in WAM!NET, and see our joint development and marketing effort as an opportunity to generate new, high-margin revenue streams for both companies, as well as expand our application-based services offerings for existing customers."
"Winstar's investment and its wireless local access solutions allow us to accelerate our business plan and aggressively expand our reach to our customers," said Edward J. Driscoll, WAM!NET'S chairman and chief executive officer. "The network agreement lowers and improves our cost structure and lets us focus on our job of developing and continually enhancing our industry smart e-services for our customers. The marketing alliance increases our sales force by fourfold and helps us move our services out to the market more effectively. We'll be able to get immediately to customers that fiber won't reach for many years."
WAM!NET Receives $50 Million Investment
Winstar will invest $50 million in the form of unregistered Winstar common stock and will receive WAM!NET convertible preferred stock.
Winstar also acquired a short-term option, for itself or its designee, to invest up to another $50 million in WAM!NET's convertible preferred stock.
The closing of this portion of the Winstar-WAM!NET transaction is subject to certain conditions, including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Winstar and WAM!NET anticipate closing this portion of the transaction in the first quarter of 2000.
Winstar Wins Network Contract
As part of a 20-year contract for network facilities, WAM!NET is purchasing approximately $250 million of network facilities from Winstar including, Wireless Fiber(SM) capacity that spans major U.S . cities. The agreement includes the co-location of some of WAM!NET's U.S. nodes at Winstar switch locations.
Joint Marketing Agreement
Winstar and WAM!NET will market each other's services through their global sales forces.
Winstar also will jointly develop new vertical industry markets that can benefit from the combination of WAM!NET's business-to-business e-services and Winstar's local/national, end-to-end broadband network.
About WAM!NET
WAM!NET Inc., with its industry smart business-to-business e-services, enables its customers to leverage the Internet to convert their analog workflow to digital workflow. The company provides the industry standard for electronic collaboration in the graphic arts, advertising, marketing and entertainment industries. WAM!NET's Industry Smart(TM) high-speed transportation network, on-line archiving service and production workflow application software allow subscribers to leverage the Internet to digitally collaborate with thousands of global business partners, in real-time. Since its incorporation in the state of Minnesota in 1994, WAM!NET has more than 6,000 customers using its services. WAM!NET's services are available throughout North America, Europe and Japan.
WAM!NET is headquartered in Eagan, Minnesota, with offices throughout Europe and Japan. The company has benefited from strategic relationships with SGI, MCI WorldCom, 3M, Heidelberg, Sumitomo, and now Winstar. For more information on WAM!NET, call 800.611.9006, or visit the company's Web site at wamnet.com. |
