MegaPath to Merge with Netifice, Expand Reach of Indirect Channels

MegaPath Networks Inc., a provider of VPN and managed IP services to businesses, said today it is merging with Netifice Communications Inc.

The companies expect to close the deal in April. They did not disclose the terms of the transaction, although they did say Netifices acquisition of MegaPath involves an undisclosed amount in stock and cash, and includes $35 million in additional funding from existing investors of both companies.

Netifice Communications said the merger will make it the largest independent provider of managed broadband VPNs in North America. The company also said buying MegaPath expands its direct and indirect sales channels, which include wholesalers, integrators and VARs. Salespeople will be able to offer a full range of integrated security, remote access and site-to-site IP VPN services, including SSL, IPSec and MPLS, especially to users in vertical markets.

“This combination is a win-win for both companies, as it enables us to provide customers a wider selection of innovative managed IP services, greater network reach and unmatched expertise, said Brian Service, CEO of MegaPath. In doing so, it enhances our ability to serve both small-to-medium size businesses and large enterprises.

The additional $35 million came from some of Netifices existing investors, including Boston Millennia Partners, Columbia Capital, Dolphin Equity Partners, Fidelity Ventures, H.I.G. Capital and Rho Ventures, along with some of MegaPaths existing investors, including Comcast Interactive Capital, Performance Equity Management, Trident Capital and U.S. Venture Partners. Netifice will use the funding to grow its managed IP service business and expand its value-added services, a strategy that could include more acquisitions.

MegaPath Networks Inc.
Netifice Communications Inc.

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