Metromedia Fiber Network Inc. (MFN) announced Tuesday that it will acquire Web site services company SiteSmith Inc. in an all-stock transaction valued at US$1.36 billion at the close of trading Monday.
MFN, who provides high-bandwidth Internet access and networking technology to businesses, will acquire SiteSmith's 400 employees, 169 customers and eight locations, pending approval of the deal. SiteSmith offers Web site infrastructure services, including site monitoring, security, back-up and troubleshooting.
The exact number of shares SiteSmith stockholders will receive, and thus the exact value of the merger, has not yet been determined. The merger's final price will depend on the 20-day average closing price of MFN's stock over a period ending four days before the merger is completed. If the stock's average price is $27.27 per share or greater, SiteSmith shareholders will receive a total of 55 million shares. If the price is less than or equal to $24.00, they will receive 62.5 million shares, and if the stock is valued between $27.26 and $24.00, shareholders will receive a block of shares equal to $1.5 billion.
Beyond SiteSmith's clients and locations, the deal also brings MFN a number of experienced executives, including Mark Spagnolo, former president and CEO of UUnet Technologies Inc. and current SiteSmith CEO, as well as David Winn, the former general manager of IBM Corp.'s Europe, Middle East and Africa division, who is the president of the same region with SiteSmith.
Metromedia Fiber Networks Inc, in White Plains, New York, can be reached at +1-914-421-6700 or http://www.mmfn.com. SiteSmith Inc., in Santa Clara, California, can be reached at +1-408-987-6400 or http://www.sitesmith.com.