Internap buys VitalStream

Web hosting company acquires digital-media service for US$217m

Internap Network Services announced Thursday that it would acquire VitalStream Holdings in a stock deal valued at about US$217 million.

VitalStream offers audio- and video-streaming services and digital-media content-delivery services for business users. Internap offers Web hosting, collocation and route-control services to businesses and carriers.

Internap's CEO James DeBlasio said in a printed statement that "the combination of VitalStream's content-delivery services and our high-performance intelligent route-control solutions positions us to create the market leading platform for distribution of rich-media content and advertising."

Internap says it will issue 11.9 million shares of common stock and will assume VitalStream's outstanding stock-options plan to close the deal. The companies expect the deal to close in the first quarter of 2007.

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