Metromedia Fiber Agrees to Buy AboveNet Communications
On June 23rd Metromedia Fiber Network, Inc. (NASDAQ: MFNX) announced a definitive agreement to buy AboveNet Communications, Inc. (NASDAQ: ABOV) for $1.55 billion in stock. AboveNet is the ISP that provides other Internet service providers and businesses with faster, more direct and reliable access to the Web. Metromedia Fiber is a facilities-based provider of technologically advanced, high bandwidth, fiber optic communica-tions infrastructure to communications carriers and corporate and government customers in the U.S. and Europe. The match means corporations can get Web access, through a high speed network from one provider. By combining Metromedia Fiber Network's virtually unlimited, pure photonic fiber network with AboveNet's high performance connectivity solutions, Internet traffic is able to flow more predictably, more reliably and at lower cost. AboveNet will have access to Metromedia Fiber's planed network of over 1.1 million fiber miles in North America and Europe. Kline Hawkes played an active role in the merger.
AboveNet Communications is a leading provider of Internet connectivity and co-location solutions for high bandwidth and business-critical applications. AboveNet is the architect of the Internet Service Exchange (ISX); a world class network that provides co-location services and Internet connectivity for Content Providers and ISPs. The AboveNet Global One-Hop Network is designed to deliver fast, reliable connections to the Internet and improve the Internet experience for all end-users.
In May of this year, AboveNet announced a definitive agreement to acquire the Palo Alto Internet Exchange (PAIX) from Compaq Computer Corporation. PAIX is the only commercial Internet Exchange (IX) not owned by a telco and that operates with an open business policy. PAIX offers a choice of carriers, encouraging direct connections between ISP's within the IX. Since its inception PAIX has been known as the best place for ISPs to exchange Internet traffic because of its neutral policies, superior facilities and services.
Just this month, AboveNet announced that Homestead Technologies, Inc., the leader in self-service Web-based publishing for consumers, has joined AboveNet's San Jose Internet Service Exchange. Homestead is a publishing platform that allows individuals, groups and small businesses to easily collaborate and create feature-rich Web sites without the expense of buying desktop software.
AboveNet is headquartered in San Jose, California and expects to stay there. The Company has plans to build new headquarters in downtown San Jose and has been expanding aggressively. In less than a year, its value has gone form $30 million to more than $1 billion. AboveNet went public in December of 1998 raising $65 million in the IPO and an additional $391 million with a second stock offering in April 1999. Revenues for the quarter ending June 30, 1999 were up 47% over revenues for the previous quarter and up 315% over revenue for the same quarter in 1998.
Frank Kline sits on the AboveNet Board of Directors. (Please see our list of Portfolio Companies inside)