VitalStream To Acquire Certain Assets Of Epoch Networks

Nov 08, 2002

VitalStream Holdings, Inc., a provider of digital broadcasting solutions, has entered into a definitive agreement to acquire certain assets of Epoch Networks Inc. and Epoch Hosting Inc. (collectively "Epoch"). The acquisition is part of VitalStream's strategic business plan to expand the company's Content Delivery Network (CDN) and customer-base. In the transaction, VitalStream is acquiring Epoch's interest in a Telco-grade data center located in Los Angeles and over 1,000 customers. To expand its CDN, VitalStream has been seeking additional data center resources in the Los Angeles media corridor. By acquiring Epoch's Los Angeles data center, VitalStream will provide its customers with a Telco-grade data center in the heart of Los Angeles, to be called the "VitalStream Broadcasting Center." As consideration for the assets it is acquiring from Epoch, VitalStream is issuing to Epoch Hosting Inc. a number of shares of VitalStream common stock equal to 16.5% of the outstanding shares of VitalStream immediately prior to closing and $250,000 in cash. The acquisition agreement also requires the issuance of additional shares in order to maintain the 16.5% ownership ratio if VitalStream issues additional shares to the former holders of VitalStream Inc. under the earnout provisions of its agreement and plan of merger with VitalStream Inc. The shares issued in the transaction will be "restricted securities," as defined in Rule 144 promulgated under the Securities Act of 1933. Consummation of the transaction is subject to satisfaction of certain conditions, including Epoch's delivery of audited financial statements with respect to the acquired business. The transaction is expected to close in the fourth quarter of 2002.