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Web hosting firms merge
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October 25, 1999: 10:57 a.m. ET
Digital Island joins with Sandpiper Networks in $621 million stock swap
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NEW YORK (CNNfn) - Digital Island Inc. agreed Monday to merge with Sandpiper Networks Inc. in a stock swap worth approximately $621 million that combines two key players in the Web hosting industry.
San Francisco-based Digital Island (ISLD) provides network services for making e-business applications available on a global scale. Sandpiper, a closely held firm based in Thousand Oaks, Calif., distributes content from hundreds of servers deployed around the world, enabling customers to access information even if the company's site is unavailable.
Under the terms of the deal, Sandpiper shareholders will receive approximately 27 million Digital Island shares. Based on Digital Island's Friday close of 23, the deal is worth about $621 million.
Digital Island shares jumped 8-11/16 to 31-11/16 in Monday morning trade following the announcement.
The combined company, which will retain the Digital Island name and its San Francisco headquarters, will include E*Trade Group (EGRP), Cisco Systems Inc. (CSCO) and Microsoft Corp. (MSFT) among its customers.
"Digital Island and Sandpiper Networks share a common vision regarding the best possible way to distribute computing intelligence around the world and deliver the right experience to the ultimate user," said Leo Spiegel, Sandpiper's president and chief executive officer. "Now we can even more effectively fulfill our vision by combining our world-class engineers, networks and technologies to better meet the needs of our global customers."
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