Internap Closes NetVmg Acqusition

Internap Network Services completes netVmg acquisition, announces agreement to acquire Sockeye Networks for about $1.75M in stock

October 7, 2003

4 Min Read

ATLANTA -- Internap® Network Services Corporation (NASDAQ: INAP), the leading provider of performance-based routing services over the Internet, announced today that it has completed its acquisition of privately held netVmg, the leading provider of equipment-based intelligent routing services.

Concurrently, Internap announced it has reached a definitive agreement to acquire a second Internet route control firm, Sockeye Networks, a privately held company based in Waltham, Massachusetts. According to industry analyst reports from The Yankee Group and Forrester Research, Inc., netVmg and Sockeye are considered to be the two leading providers of equipment-based intelligent route control technologies; and, earlier this year, Sockeye received the "Product of the Year Award" from CMP Media's Network Magazine for its GlobalRoute route optimization solution.

"These acquisitions give Internap an intelligent route control capability that extends to the customer's premises, along with technologies that could potentially be incorporated into their core network," said Jennifer Liscom, principal analyst, Gartner. "By offering a managed, equipment-based solution to enterprises, Internap will truly be able to manage edge-to-edge performance within the limitations of current Internet routing methodologies. Positioning itself as an Internet performance specialist that is capable and willing to manage 'multi-homed' networks, carves a niche for Internap that carriers will find difficult to invade."

With the addition of netVmg and Sockeye Internet routing technologies to Internap's proprietary ASsimilator platform, Internap now holds the dominant position in software patents and patents pending associated with intelligent route control. Through these acquisitions, Internap has assembled an engineering and research team to integrate and enhance the acquired platforms through future releases.

"Over the past year, Internap has strengthened its financial position and its focus on strategic growth opportunities," said Greg Peters, president and CEO of Internap. "The addition of netVmg and Sockeye's industry-leading route management technology, along with experienced engineering staff, solidifies Internap's leadership position in performance-based Internet routing services."

The combined software-based capabilities of Internap, netVmg and Sockeye Networks expand Internap's intelligent route control product portfolio, delivering these key customer benefits:

  • For customers with mission-critical applications that require high-performance IP connectivity, Internap offers a fully managed solution powered by proactive/predictive route control that intelligently optimizes Internet traffic based on key performance metrics across the entire Internet.

  • For customers who are interested in maximizing the performance of "best efforts" ISPs in a multi-homed environment, Internap offers a premise-based intelligent route control solution that is based on user-defined policies associated with performance and cost metrics. This "reactive" software technology defines and executes adjustments in routing when Internet "events" or traffic congestion cause performance to exceed customer-defined thresholds.

  • In addition, the acquisition of netVmg and Sockeye further enhances Internap's Internet-wide traffic performance data collection, reporting and analysis tools, accelerating the development and management of both predictive and reactive intelligent route control capabilities.

"The combination of our GlobalRoute Internet management capabilities with the technologies of Internap and netVmg is a major step towards advancing the performance and reliability of the Internet," said Valeri A. Marks, chairman and CEO, Sockeye Networks. "GlobalRoute will strengthen Internap's service offerings and accelerate the development of true, edge-to-edge route control management, accelerating the adoption and use of mission-critical applications over the public Internet."

Existing customers of Sockeye include: Abbott Laboratories, Computer Associates, EBSCO Publishing, EMC and Thomson Financial. netVmg customers include: @Road, ADP, Arizona Department of Commerce,, hotjobs, Mentor Graphics, New York Mercantile Exchange, nVIDIA,, PAJO Networks, ProQuest,, Safeway, Storage Continuity, LLC and Ventures Online.

Internap's acquisition of netVmg is an all-stock transaction including the following terms: Internap issued to netVmg shareholders approximately 345,000 unregistered shares of its Series A convertible preferred stock. As part of the acquisition agreement signed several months ago, netVmg shareholders infused approximately $3.9 million of new capital into netVmg to eliminate selected liabilities prior to the acquisition. Additionally, 1.5 million common stock warrants (priced at the date of the close) were issued to netVmg shareholders. The warrants are exercisable only if the netVmg shareholders invest an amount no less than $4.4 million in any future private placement.

Under terms of the definitive agreement to acquire Sockeye Networks, Internap will issue unregistered shares of common stock to Sockeye investors in an amount equal to approximately $1.75 million. This transaction is subject to customary closing conditions and is expected to close in mid-October.

Internap Network Services Corp.

netVmg Inc.

Sockeye Networks

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