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ICG sells Netcom assets
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January 6, 1999: 8:16 a.m. ET
MindSpring buying telecom service subsidiary's U.S. assets for $245M
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NEW YORK (CNNfn) - ICG Communications Inc. unveiled plans Wednesday to sell the U.S. operational assets of its Netcom subsidiary to Internet service provider MindSpring Enterprises Inc. for $245 million.
ICG, an integrated communications provider based in Englewood, Colo., offers local and long-distance, enhanced telephony, and data services through a vast fiber-optic network in California, Colorado, the Ohio Valley and parts of the southeastern United States.
ICG bought Netcom On-line Communication Services for $285 million in January 1998.
Wednesday's sale of Netcom's U.S. dial-up, dedicated and web-hosting accounts is part of an ongoing effort by ICG to spin off parts of the unit as it concentrates on core telecom businesses. ICG said it is continuing with its plans to sell Netcom's remaining international assets. The sale announced Thursday involves an agreement between an ICG unit, ICG Services Inc., and MindSpring.
"This acquisition is consistent with our mission to become a major player in the telecommunications industry of the future," Charles Brewer, MindSpring's chairman and chief executive officer, said Wednesday.
MindSpring is an Atlanta-based Internet service company that provides Web-browsing, electronic mail, online chats and access to more than 20,000 newsgroups to dial-up subscribers in over 375 locations in the U.S. The company also offers Web-hosting services and domain registration.
Under terms of the transaction, ICG will sell Netcom's U.S. dial-up, dedicated and web-hosting accounts for $215 million cash and $30 million in stock.
ICG will retain Netcom's network "backbone," spread across 700 cities nationwide. The two companies have also agreed to allow MindSpring to use ICG's network and network management capabilities.
MindSpring also will acquire rights to the Netcom name everywhere except Canada, the United Kingdom and Brazil; to operational facilities in San Jose, Calif., and Dallas; and to select software and equipment.
The sale is expected to close in the first quarter of 1999.
Shares of ICG ended up 1-9/16 at 23-1/8 Tuesday on the Nasdaq, while MindSpring stock climbed 9/16 to close at 66-9/16. 
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