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Internap to Buy VitalStream

October 13, 2006|From Bloomberg News

Internap Network Services Corp. said Thursday that it agreed to buy Irvine-based VitalStream Holdings Inc. for $217 million in stock, expanding Internap's line of products for Web broadcasting.

Internap, based in Atlanta, would swap 0.5132 of a share for each VitalStream share. The offer values VitalStream at $8.75 a share based on Internap's closing price Wednesday of $17.05.

VitalStream shares soared $1.27, or 20%, on Thursday to $7.67. Internap fell $1.64, or 9.6%, to $15.41.

Internap this year reported its first profit since its initial public offering in 1999. The VitalStream acquisition, which Internap expects to complete in the first quarter, would combine VitalStream's Web broadcasting products with Internap's network services for businesses.

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