MFN Acquires Web Infrastructure Company in $1.36 Billion Deal

By Michael Sciannamea, Web Editor

In a transaction valued at approximately $1.36 billion, Metromedia Fiber Network Inc. (MFN) has acquired SiteSmith Inc., a provider of Internet infrastructure management services. The acquistion is expected to close by the end of the year and is subject to customary conditions.

According to MFN, the acquisition will help position the company as leading provider of managed optical Internet infrastructure solutions. MFN currently deploys optical IP Internet infrastructure within key metropolitan areas worldwide, and provides data centers and Internet connectivity through its subsidiary, AboveNet Communications. With this acquisition, MFN will provide its customers with a global end-to-end optical Internet infrastructure outsourcing solution. The combined company will offer its comprehensive managed services with its unmetered, unshared fiber network connections at the local loop, a globally connected fiber backbone network, Internet connectivity, and co-location data centers.

SiteSmith provides its customers with Internet infrastructure management solutions including design and architecture, hardware and software installation, co-location, and network connectivity, and ongoing management through provision of 24x7 monitoring, security services and fail-over systems.

Pursuant to the merger agreement, SiteSmith shareholders will receive 55 million to 62.5 million Metromedia shares. If the average closing price of Metromedia common stock for the 20 trading days ended four days prior to closing is greater than or equal to $27.27 a share, SiteSmith shareholders will receive 55 million shares.

If the average price is less than or equal to $24 a share, they will receive 62.5 million shares. If the average price is between $24 and $27.27, they will receive Metromedia shares equal to $1.5 billion.