DSLN DSL.net Secures New $15 Million Investment; Additional Investment from New
Syndicate Positions Company to Accelerate Smart Growth Strategy
NEW HAVEN, Conn., Dec 26, 2001 (BUSINESS WIRE) -- 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."
About DSL.net
Based in New Haven, Conn., DSL.net, Inc. is a high-speed data communications and
Internet access provider that uses digital subscriber line technology to provide
high-speed Internet access solutions to small- and medium-sized businesses
throughout the United States. DSL.net allows smaller businesses to migrate their
operations online and more effectively compete in the Internet economy. For more
information on DSL.net, visit www.dsl.net, e-mail info@dsl.net, or call
1-877-DSL-NET1 (1-877-375-6381).
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include, among others, statements regarding DSL.net's forecasts of financial and
operating plans and results. These statements and other forward-looking
statements are subject to a variety of risks and uncertainties, many of which
are beyond DSL.net's control, which could cause actual results to differ
materially from those contemplated in these forward-looking statements. In
particular, the risks and uncertainties include, among other things, (i)
fluctuations in DSL.net's quarterly operating results, which could adversely
effect the price of its common stock; (ii) DSL.net's unproven business model,
which may not be successful; (iii) DSL.net's ability to execute its business
plan in a timely manner to generate the forecasted financial and operating
results; (iv) the completion of the sale of convertible redeemable preferred
stock in the Columbia Capital-led financing is subject to stockholder and
regulatory approvals, which may or may not be obtained; (v) the completion of
the sale of convertible redeemable preferred stock to VantagePoint Venture
Partners, in its final installment, is subject to the achievement of certain
business objectives which may or may not be achieved; (vi) even if these
financings are completed, DSL.net's independent accountants may include a "going
concern" qualification in their audit report on DSL.net's 2001 financial
statements due to the timing of the investments or changing business conditions;
(vii) if these financings are not completed, DSL.net's need for additional funds
during 2002, which may not be available on acceptable terms or at all, which
could adversely impact DSL.net's ability to implement its business plan and
continue as a "going concern"; (viii) risks associated with acquisitions,
including difficulties in identifying and completing acquisitions, integrating
acquired businesses or assets and realizing the revenue, earnings or synergies
anticipated from any acquisitions; (ix) the challenges relating to the timely
installation of service for customers, including DSL.net's dependence on
traditional telephone companies to provide acceptable telephone lines in a
timely manner; (x) DSL.net's dependence on wholesale DSL providers to provide it
with local DSL facilities in areas where it has not deployed its own DSL
equipment; (xi) the difficulty of predicting the new and rapidly evolving
high-speed data communications industry; (xii) regulatory, legislative, and
judicial developments, which could adversely affect the way DSL.net operates its
business; and (xiii) DSL.net's ability to recruit and retain qualified
personnel, establish the necessary infrastructure to support its business, and
manage the growth of its operations. Existing and prospective investors are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. DSL.net undertakes no obligation, and
disclaims any obligation, to update or revise the information contained in this
press release, whether as a result of new information, future events or
circumstances or otherwise. For additional information regarding these and other
risks faced by DSL.net, see the disclosure contained under "Risk Factors" in
DSL.net's Annual Report on Form 10-K for the year ended December 31, 2000, and
under "Additional Risk Factors" in its Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001, each of which has been filed with the
Securities and Exchange Commission.
DSL.net is a trademark of DSL.net, Inc. Other company names may be trademarks of
their respective owners.
CONTACT: DSL.net, New Haven
Bill Pankracij, 203/782-3815
Ray Allieri, 203/782-7490
investors@dsl.net
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-0-
KEYWORD: CONNECTICUT
INDUSTRY KEYWORD: BANKING
COMPUTERS/ELECTRONICS
INTERNET
SOURCE:
DSL.net,
Inc.
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