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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 January 11, 1999
(Date of earliest event reported: January 5, 1999)
VERIO INC.
(Exact name of registrant as specified in its charter)
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Delaware 0-24219 84-1339720
(State or other jurisdiction of (Commission File Number) (IRS Employer Identification No.)
incorporation)
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8005 South Chester Street, Suite 200, Englewood, Colorado 80112
(Address of Principal Executive Offices) (Zip Code)
(303) 645-1900
(Registrant's telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On January 5, 1999, the Registrant completed the acquisition of Best
Internet Communications, Inc., d/b/a/ Hiway Technologies, Inc. ("Hiway"). The
acquisition of Hiway was consummated pursuant to an Amended and Restated
Agreement and Plan of Merger, dated as of November 17, 1998 (the "Merger
Agreement"), providing for a merger of a wholly owned subsidiary of the
Registrant with and into Hiway (the "Merger"), with Hiway surviving as a wholly
owned subsidiary of the Registrant. Upon consummation of the Merger,
approximately 3.14 million shares of the Registrant's common stock became
issuable, and approximately $1.76 million became payable, to the former
shareholders of Hiway, reflecting a common stock exchange ratio of 0.087568392
shares of the Registrant's common stock and a per share cash amount of $4.900728
for each outstanding share of Hiway's common stock. In addition, approximately
1.77 million additional shares of the Registrant's common stock have been
reserved for issuance upon the exercise of options and warrants issued in
replacement of Hiway options and warrants that were not exercised prior to the
consummation of the Merger, reflecting an option/warrant exchange ratio of
0.3938639. The Merger was approved by 98.97% of the voting shares of the former
shareholders of Hiway at a special meeting of shareholders held on December 29,
1998. Following the Merger, the former shareholders of Hiway will own
approximately 13% of the Registrant's common stock, on a fully diluted basis, of
which approximately 59% of such shares are subject to a six-month lockup.
Pursuant to the terms of the Merger Agreement, Hiway designated Arthur L. Cahoon
to serve on the board of directors of the Registrant. The Merger is expected to
be accounted for under the purchase method of accounting, and was structured as
a taxable transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Best Internet Communications, Inc.
Incorporated herein by reference to pages F-5 to F-23 of the Proxy
Statement/Prospectus forming part of the Registrant's Registration Statement on
Form S-4 (File No. 333-67715).
(b) Pro Forma Financial Information
Incorporated herein by reference to pages 70 to 83 of the Proxy
Statement/Prospectus forming part of the Registrant's Registration Statement on
Form S-4 (File No. 333-67715).
(c) Exhibits.
2.1 Amended and Restated Agreement and Plan of Merger, dated as of
November 17, 1998, by and among the Registrant, Purple
Acquisition, Inc. and Best Internet Communications, Inc.
(incorporated by reference to Annex A included in the Proxy
Statement/Prospectus forming part of the Registrant's
Registration Statement on Form S-4 (File No. 333-67715)).
20.1 Press Release issued by the Registrant on January 5, 1999.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of DeMeo, Young, McGrath & Company, P.A.
99.1 Financial Statements of Best Internet Communications, Inc.
(incorporated herein by reference to pages F-5 to F-23 of the
Proxy Statement/Prospectus forming part of the Registrant's
Registration Statement on Form S-4 (File No. 333-67715)).
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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.
VERIO INC.
By: /s/ CARLA HAMRE DONELSON
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Carla Hamre Donelson
Vice President, General Counsel and
Secretary
Dated: January 11, 1999
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
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2.1 Amended and Restated Agreement and Plan of Merger, dated as of
November 17, 1998, by and among the Registrant, Purple
Acquisition, Inc. and Best Internet Communications, Inc.
(incorporated by reference to Annex A included in the Proxy
Statement/Prospectus forming part of the Registrant's
Registration Statement on Form S-4 (File No. 333-67715)).
20.1 Press Release issued by the Registrant on January 5, 1999.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of DeMeo, Young, McGrath & Company, P.A.
99.1 Financial Statements of Best Internet Communications, Inc.
(incorporated herein by reference to pages F-5 to F-23 of the
Proxy Statement/Prospectus forming part of the Registrant's
Registration Statement on Form S-4 (File No. 333-67715)).
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Exhibit 20.1
FOR IMMEDIATE RELEASE
January 5, 1999
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VERIO MEDIA CONTACT VERIO INVESTOR CONTACT
Paul Lonnegren Whitney Fogt
Clarus Public Relations, Inc. Verio Inc.
303.296.0343 (x241) 303.645.1921
[email protected] [email protected] Corporate newsroom:
Investor information:
http://newsroom.verio.net http://investors.verio.net
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VERIO INC. BECOMES WORLD'S LARGEST DOMAIN-BASED WEB HOSTING COMPANY WITH CLOSING
OF HIWAY TECHNOLOGIES ACQUISITION
Web-Hosting Strength Positions Verio to Lead in Global Electronic Commerce
Explosion
ENGLEWOOD, CO (JANUARY 5, 1999) - Verio Inc. (NASDAQ:VRIO), a leading provider
of comprehensive business Internet services, today became the world's largest
domain-based Web-site-hosting company with the closing of its previously
announced acquisition of Boca Raton, Florida-based Hiway Technologies Inc.
Web-site hosting is the fundamental platform from which businesses establish
their global Web presence, publish online information about their products and
services, and engage in electronic commerce and other business Internet
activities. With its preeminent worldwide Web-hosting position, Verio is
strategically poised to capitalize on the global electronic commerce explosion.
Citing figures from Network Solutions' (NASDAQ:NSOL) InterNIC registration
service, Verio's acquisition of Web-hosting company Hiway Technologies makes
Verio the world's largest domain-based (www.yourcompany.com) Web-hosting company
with more than 160,000 hosted Web sites. Verio is also one of the fastest
growing domain-based Web-hosting companies, adding on average a new hosted Web
site about every five minutes and a new electronic "storefront" every five
hours. According to InterNIC data, Verio has approximately 260,000 domain-name
registrants in .com, .net and .org, representing over 7 percent of all domain
names currently in use. Verio offers domain-name registration services through a
strategic relationship with Network Solutions.
"Companies are recognizing in droves that Web sites allow them to conduct their
business online," said Verio CEO Justin Jaschke. "This acquisition, in
combination with Verio's own Web-hosting base, clearly establishes Verio as the
world's preeminent Web-hosting company and gives us tremendous leverage to take
a leading role in providing businesses with their e-commerce and related
enhanced Internet capabilities. With the closing of Hiway, we expect Web
hosting, electronic commerce and other enhanced services to comprise about 50
percent of Verio's revenue stream."
The Hiway acquisition adds more than 2,000 resellers to Verio's worldwide
distribution channels, increasing the company's reseller roster to more than
4,000 in more than 170 countries. "Hiway has an impressive track record of
market leadership and growth and brings to Verio the leading technology
platform, outstanding management and powerful distribution channels upon which
Hiway's success was built," Jaschke added.
Founded in 1995, Hiway Technologies provides Web hosting, regional Internet
access, advanced electronic commerce and Web server co-location services to more
than 105,000 customers. Hiway had revenues of approximately $11.4 million in the
three months ended November 1998. Verio's total purchase price for the
acquisition included $176 million paid in cash and the issuance of approximately
3.14 million shares of Verio's common stock. Additionally, Verio has assumed
Hiway's outstanding options and warrants that may be exercised for approximately
1.78 million shares of Verio's common stock. Following a transition period,
Verio will operate Hiway Technologies and its affiliates under the Verio brand
name and intends to quickly integrate Hiway into its existing operational
structure.
"Strategically and operationally, this merger makes a lot of sense for Hiway
Technologies and our customers," said Hiway Technologies President Scott H.
Adams. "The acquisition allows us to couple our leading Web-hosting services
with Verio's high-performance Tier One national network, large connectivity
customer base and existing enhanced service offerings. Together, we now have the
financial resources, technical infrastructure and management talent to
accelerate our already rapid growth in Web hosting, electronic commerce and
other business Internet services."
ABOUT VERIO INC.
Verio Inc. (NASDAQ:VRIO) is a leading provider of comprehensive business
Internet services - including broadband connectivity, virtual private networks,
Web-hosting solutions and e-commerce - with an emphasis on serving the small and
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mid-sized business market. Since its inception in March 1996, Verio has rapidly
established a global presence through the acquisition, integration and growth of
independent Internet providers with a business customer focus. Verio supports
its operations with highly reliable and scalable national infrastructure and
systems including a facilities-based Tier One national network. Verio delivers
locally-based sales and engineering support in 41 of the top 50 U.S. markets
under the Verio brand name and provides Web-hosting services to customers in
more than 170 countries.
For more information on Verio, visit the company's Web site at www.verio.com.
The corporate headquarters are located in Englewood, Colorado at 8005 S. Chester
St., Suite 200, 80112, phone number 303.645.1900.
Except for the historical information contained herein, certain matters set
forth in this press release are forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and uncertainties,
including but not limited to fluctuations in operating results, additional
capital requirements, competition, integration of acquisitions and
implementation of network infrastructure. Readers are also encouraged to refer
to Verio's reports from time to time filed with the Securities and Exchange
Commission, including the Company's Current Report on Form 8-K filed on July 7,
1998, and the Company's Current Report on Form 8-K filed on October 28, 1998,
for a further discussion of Verio's business and risk factors that may affect
operating and financial results and the financial information provided herein
with respect to recent acquisitions.
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Report on Form 8-K of Verio
Inc. filed January 11, 1999 of our report dated May 27, 1998 on the consolidated
financial statements of Best Internet Communications, Inc. which is included in
the Proxy Statement/Prospectus forming part of Verio Inc.'s Registration
Statement on Form S-4 (File No. 333-67715).
/s/ PricewaterhouseCoopers LLP
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PricewaterhouseCoopers LLP
January 11, 1999
San Jose, California
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Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the inclusion and/or incorporation by reference in the Report on
Form 8-K of Verio Inc. dated January 11, 1999 of our report dated September 17,
1997 with respect to the balance sheet of Hiway Technologies, Inc. as of
December 31, 1996 and the related statements of income, retained earnings and
cash flows for the period from April 6, 1995 (date of inception) to December 31,
1995 and the year ended December 31, 1996, included in the Proxy
Statement/Prospectus forming part of Verio Inc.'s Registration Statement on Form
S-4 (File No. 333-67715).
/s/DeMeo, Young, McGrath & Company, P.A.
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DeMeo, Young, McGrath & Company, P.A.
Fort Lauderdale, Florida
January 11, 1999
