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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 5, 1999
MINDSPRING ENTERPRISES, INC.
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(Exact name of registrant as specified in its charter)
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DELAWARE 0-27890 58-2113290
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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1430 WEST PEACHTREE ST., SUITE 400, ATLANTA, GA 30309
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(Address of principal executive offices)
Registrant's telephone number, including area code: (404) 815-0770
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ITEM 5. OTHER EVENTS.
On January 5, 1999, MindSpring Enterprises, Inc., a Delaware
corporation (the "Company"), entered into an Asset Purchase Agreement (the
"Asset Purchase Agreement") with NETCOM On-Line Communication Services, Inc., a
Delaware corporation and an indirect wholly-owned subsidiary of ICG
Communications, Inc. ("NETCOM"), pursuant to which the Company agreed to
acquire certain of the tangible and intangible assets and rights used in
connection with the Internet services business currently operated by NETCOM in
the United States (the "Business"), including (i) approximately 400,000 of
NETCOM's individual access accounts; (ii) approximately 3,000 dedicated
Internet access accounts; (iii) approximately 18,000 Web hosting accounts;
(iv) leased operations facilities in San Jose, California and Dallas, Texas;
(v) certain contracts with original equipment manufacturers; (vi) NETCOM's
rights to the "NETCOM" name (except in Canada, the United Kingdom and Brazil);
(vii) certain intellectual property of NETCOM held or used in connection with
the Business; (viii) all engineering, business and other books, papers, files
and records directly related to the Business; (ix) all manufacturer's
warranties with respect to the assets being acquired, if any, to the extent
assignable; and (x) certain other tangible assets such as computers and
furniture held or used in connection with the Business (collectively, the
"Assets"). The Company intends to use the Assets in a manner similar to the
manner in which NETCOM used the Assets.
The NETCOM operations in Canada and the United Kingdom are not
included in this transaction. In addition, NETCOM will retain all of the assets
used in connection with its network operations. Under a separate network
services agreement, NETCOM will sell the Company wholesale access to its
network.
The Company agreed to purchase the Assets for approximately
$245 million, including $215 million in cash and $30 million in common stock of
the Company. The Company expects the transaction to be completed later this
quarter, subject to certain customary closing conditions and regulatory
approvals.
A copy of the press release, dated January 6, 1999, issued by
the Company regarding the above-described transaction is attached as Exhibit
99.1 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release issued by the Company dated January 6, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MINDSPRING ENTERPRISES, INC.
/s/ Samuel R. DeSimone, Jr.
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Samuel R. DeSimone, Jr.
Executive Vice President and
General Counsel
Date: January 8, 1999
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EXHIBIT INDEX
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EXHIBIT NUMBER EXHIBIT
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99.1 Press release issued by the Company dated January 6, 1999.
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Exhibit 99.1
MindSpring Purchases Netcom Assets From ICG Communications, Inc.
ATLANTA--(BUSINESS WIRE)--Jan. 6, 1999--MindSpring Enterprises, Inc.
(Nasdaq:MSPG) today announced a definitive agreement with ICG Communications,
Inc. (Nasdaq:ICGX) to purchase the Netcom customer base of approximately 400,000
individual Internet access accounts, 3,000 dedicated Internet access accounts,
and 18,000 web hosting accounts in the United States. MindSpring will pay ICG
Communications approximately $245 million, including $215 million in cash and
$30 million in MindSpring stock.
The sale also encompasses various assets used in serving those subscribers,
including leased operations facilities in San Jose, Calif. and Dallas.
MindSpring also acquires all U.S. rights held by ICG Communications to the
"Netcom" name, as well as select software and equipment. ICG Communications will
retain the network assets and sell MindSpring wholesale access to the network
under a separate network services agreement. The Netcom operations in Canada and
the United Kingdom are not included in this transaction.
"This acquisition is consistent with our mission to become a major player in the
telecommunications industry of the future," said Charles M. Brewer, chairman and
CEO of MindSpring Enterprises. "We believe Netcom's assets and employees will
enable MindSpring to expand the scope and depth of top-notch service that we
currently provide to our customers. We look forward to a long-term networking
relationship with ICG."
"We believe this acquisition, when completed, will put MindSpring over the 1
million dial-up subscriber mark," continued Brewer. "Not only have we
demonstrated the ability to drive organic growth and successfully manage
acquisitions, but we have done it profitably since the fourth quarter of 1997."
"This sale and the related network services agreement with MindSpring is
consistent with our business plan to focus on our core telecommunications
operations, and expand our customer base by building stronger relationships with
Internet service providers," said J. Shelby Bryan, ICG Communications' president
and chief executive officer. "We are confident that MindSpring will continue to
provide our Netcom subscribers with affordable and quality service."
The Company expects the transaction to be completed later this quarter, subject
to certain customary closing conditions and regulatory approvals.
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About ICG Communications
ICG Communications, Inc. (NASDAQ: ICGX) is a leading integrated communications
provider (ICP) offering high-quality telecommunications services through its
subsidiary operations. With headquarters in Englewood, Colo., ICG has extensive
switched fiber-optic networks and offers local and long distance, enhanced
telephony and data services in California, Colorado, the Ohio Valley and parts
of the southeastern United States. ICG also is a leading designer and installer
of copper, fiber and wireless infrastructure for buildings and campuses. Further
information is available on ICG's web site located at http://www.icgcomm.com.
About MindSpring
MindSpring Enterprises, Inc. (NASDAQ:MSPG) is a leading Internet service
provider focused on doing an exceptional job of serving its customers, its
employees, its owners and its community by following its Core Values And Beliefs
(http://www.mindspring.net/aboutms/cvb/). MindSpring's dial-up subscribers can
browse the World Wide Web, send electronic mail, participate in informative
online chats and access more than 20,000 newsgroups. MindSpring offers local
Internet service throughout the United States, and is also a leading provider of
Web hosting and domain registration services. For more information about
MindSpring and its services, visit the Web site (http://www.mindspring.net/) or
call 1-888-MSPRING to set up an account. MindSpring has received the following
Awards & Recommendations:
- -- 1998 MVP Award for Best National ISP, "It's a no-brainer for Internet
access and small-biz Web hosting." -- PC Computing, January 1999.
- -- 1998 HOC 100 Editor's Gold Award for Internet Service Provider, "Neither
consumer-cute nor no-frills/no-fun, MindSpring is both the easiest and most
efficient ISP for home-based workers." -- Home Office Computing, December
1998.
- -- World Class Award for Best ISP, "It's hard to improve on what readers tell
us is the best support in the business," -- PC World, July 1998.
- -- Buy It recommendation of MindSpring as the national ISP providing
the best value, ". . . its software selection beats the pants off
the competition, and MindSpring's technical support gets our nod
as the best overall," -- CNET: The Computer Network, November
1997 (Reiterated July 1998).
- -- Best Buy, "This company prides itself on being 'patient,'" -- Smart Money
Interactive, June 1998.
- -- "Best Buy" for Web Hosting, Home Office Computing, April 1998.
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When used in this press release, the words discussing conditional or
future-oriented expressions are intended to identify forward- looking
statements. Such statements are subject to risks and uncertainties that could
cause actual results to differ materially from the possible results referred to
in such forward-looking statements. Such risks and uncertainties may include,
but are not limited to: the Corporation's successful integration of the new
subscribers purchased in this transaction and the successful management of
growth; conditions and developments in the Internet and technology markets and
in the general economy; and other risks and uncertainties described from time to
time in the Corporation's press releases and Securities and Exchange Commission
reports and filings.
CONTACT: MindSpring Enterprises, Inc., Atlanta
Kirsten Witt, 404/287-0924
[email protected]
or
Ed Hansen, 404/287-0893
[email protected]
