EarthLink to Acquire IT Solution Center and Hosted Application Business from Synergy Global Solutions
ATLANTA, Oct. 27, 2011 /PRNewswire/ — EarthLink, Inc. (NASDAQ: ELNK), a leading IP infrastructure and services company, has signed an agreement to purchase the IT Solution Center and hosted application business from Synergy Global Solutions, a provider of hosted IT products, services and solutions based in Western, NY. This acquisition will provide EarthLink with scalable 24x7x365 IT service support capabilities to allow customers to outsource critical IT services in a cost efficient manner. The IT Solution Center is comprised of a Help Desk, Network Operations Center and remote care platform that provide SAS-70 certified services, tiered network support and monitoring, remote technical management and support across a wide range of networking and operating system platforms. The acquisition is expected to close before the end of the year, subject to satisfaction of customary closing conditions.
Under the terms of this agreement, EarthLink will also assume relationships with approximately 120 Value Added Resellers (VARs) that currently sell the Solution Center and hosted application services. EarthLink plans to leverage this distribution channel to offer those VARs additional EarthLink Cloud and communications solutions. Additionally, EarthLink plans to extend the IT Solution Center services to its base of over 100,000 business customers and through its existing sales channels.
In addition to the Solution Center, EarthLink is acquiring Synergy’s cloud-based application service which provides end-to-end hosted IT capabilities for the environmental services vertical market. This service already utilizes the EarthLink Cloud framework for hosting its cloud-based application service and features SuccessWare21Ã‚® software.
Synergy President Clark Crook will join EarthLink as Vice President of Solution Center Services, and will report to Brian Fink, EarthLink Executive Vice President of Managed Services. Crook will also be responsible for managing EarthLink’s Solutions Center and deploying these capabilities throughout the company’s distribution channels. The Solutions Center, located in Buffalo, NY, is staffed by more than 80 support specialists and engineers who will also join the EarthLink team.
“The addition of the IT Solution Center fills a key strategic capability for scaled IT support for our growing Managed Services portfolio,” explained Fink. “This skilled team, with years of expertise in IT support services, will enable us to quickly provide these services in combination with our cloud, security and connectivity solutions to our customers. In addition, the SuccessWare application is already part of EarthLink Cloud and will be leveraged to expand our application cloud framework.”
Following the close of the transaction, Synergy’s remaining Value Added Reseller business will continue to distribute the IT Solution Center services and the SuccessWare application as an EarthLink customer.
Ray Hutch, founder and CEO of Synergy Global Solutions commented, “The Solutions Center and SuccessWare products have long been key elements in meeting customers’ IT needs. With EarthLink’s deep resources and strategic vision for growth, the Solution Center’s competency in providing leading edge technical help desk services can be expanded nationwide. In partnership with EarthLink, Synergy will continue to offer these best-in-class services to our Western New York State clients.”
EarthLink, Inc (NASDAQ: ELNK) is a leading provider of Internet Protocol (IP) infrastructure and services to medium-sized and large businesses, enterprise customers, and over 1.6 million customer relationships across the United States. The company has provided Internet access and communications services for decades and has earned an award-winning reputation for both outstanding customer service and product innovation. Their EarthLink Business(TM) division provides a full complement of voice, data, mobile, cloud hosting and equipment services over a 28,000 mile fiber network and MPLS-based services nationwide. EarthLink Consumer is a leading Internet Service Provider connecting people to the power and possibilities of the Internet. For more information, visit EarthLink’s website www.earthlink.net
Cautionary Information Regarding Forward-Looking Statements
This press release includes “forward-looking” statements (rather than historical facts) that are subject to risks and uncertainties that could cause actual results to differ materially from those described. Although we believe that the expectations expressed in these forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct. Our actual results could be materially different from and worse than our expectations. With respect to such forward-looking statements, we seek the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include:(1) that we may not be able to execute our business strategy to grow our business services revenue, which could adversely impact our results of operations and cash flows; (2) that we may be unsuccessful in making and integrating acquisitions into our business, which could result in operating difficulties, losses and other adverse consequences; (3) that if we do not continue to innovate and provide products and services that are useful to individual subscribers and business customers, we may not remain competitive, and our revenues and operating results could suffer; (4) that the continuing effects of adverse economic conditions could harm our business; (5) that we face significant competition in the communications industry that could reduce our profitability; (6) that decisions by the Federal Communications Commission relieving ILECs of certain regulatory requirements, and possible further deregulation in the future, may restrict our ability to provide services and may increase the costs we incur to provide these services; (7) that our wholesale services, including our broadband transport services, will be adversely affected by pricing pressure, network overcapacity, service cancellations and other factors; (8) that our operating performance will suffer if we are not offered competitive rates for the access services we need to provide our long distance services; (9) that we may experience reductions in switched access and reciprocal compensation revenue; (10) that our inability to maintain our network infrastructure, portions of which we do not own, could adversely affect our operating results; (11) that if we are unable to interconnect with AT&T, Verizon and other incumbent carriers on acceptable terms, our ability to offer competitively priced local telephone services will be adversely affected; (12) that we may not be able to compete effectively if we are unable to install additional network equipment or convert our network to more advanced technology; (13) that failure to obtain and maintain necessary permits and rights-of-way could interfere with our network infrastructure and operations; (14) that our failure to implement cost reduction initiatives will adversely affect our results of operations; (15) that we face significant competition in the Internet industry that could reduce our profitability; (16) that our consumer business is dependent on the availability of third-party network service providers; (17) that the continued decline of our consumer access subscribers, combined with the change in mix of our consumer access base from narrowband to broadband, will adversely affect our results of operations; (18) that our commercial and alliance arrangements may not be renewed or may not generate expected benefits, which could adversely affect our results of operations; (19) that privacy concerns relating to our business could damage our reputation and deter current and potential users from using our services; (20) that changes in technology in the Internet access industry could cause a decline in our business; (21) that we may be unable to employ sufficient qualified personnel, and the loss of any of our key executive officers could adversely affect us; (22) that interruption or failure of our network and information systems and other technologies could impair our ability to provide our services, which could damage our reputation and harm our operating results; (23) that our business depends on effective business support systems and processes; (24) that government regulations could adversely affect our business or force us to change our business practices; (25) that our business may suffer if third parties used for customer service and technical support and certain billing services are unable to provide these services or terminate their relationships with us; (26) that we may not be able to protect our intellectual property; (27) that we may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future; (28) that if we, or other industry participants, are unable to successfully defend against legal actions, we could face substantial liabilities or suffer harm to our financial and operational prospects; (29) that we may be required to recognize additional impairment charges on our goodwill and intangible assets, which would adversely affect our results of operations and financial position; (30) that we may have to undertake further restructuring plans that would require additional charges, including incurring facility exit and restructuring charges; (31) that we may have exposure to greater than anticipated tax liabilities and the use of our net operating losses and certain other tax attributes could be limited in the future; (32) that we may reduce, or cease payment of, quarterly cash dividends; (33) that our stock price may be volatile; (34) that our indebtedness could adversely affect our financial health and limit our ability to react to changes in our industry; and (35) that provisions of our second restated certificate of incorporation, amended and restated bylaws and other elements of our capital structure could limit our share price and delay a change of management. These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from management’s expectations, are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements and risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2010.
SOURCE EarthLink, Inc.