US LEC Acquires StarNet

US LEC Corp. acquires StarNet and its MegaPOP Internet service

November 11, 2004

2 Min Read

CHARLOTTE, N.C. -- US LEC Corp. (Nasdaq: CLEC), a telecommunications carrier serving businesses and enterprise organizations throughout the Eastern United States, announced today that it will acquire the assets of StarNet, Inc., a nationwide provider of dial-up Internet access and telephony services to Internet Service Providers (ISPs). In a sale order signed on November 10, 2004, the United States Bankruptcy Court for the Northern District of Illinois approved the purchase of StarNet’s assets, including its popular MegaPOP ISP service.

“We are pleased to add StarNet and its MegaPOP offering to our data services portfolio, and we know that StarNet’s customers will immediately begin enjoying the stability and improvements that US LEC provides,” said Aaron Cowell, president and CEO for US LEC. “As one of StarNet’s largest vendors, we will leverage our familiarity with their organization, in addition to our experience assimilating Fastnet’s data assets, to make this an ideal integration opportunity. The resulting combination will raise the quality of these Internet services to standards that competitors will be hard pressed to meet.”

Cowell continued, “The StarNet acquisition expands our commitment to growing our data capabilities, and it strengthens US LEC’s business model. The transaction is expected to be almost immediately accretive to US LEC’s bottom line, adding nearly 400 new customers and more than seven million dollars in annual revenue. We anticipate positive impacts on US LEC's revenue and EBITDA results.”

StarNet currently supplies its wholesale MegaPOP Internet service to nearly 400 ISPs across the United States. With the acquisition complete, US LEC will provide local dial-up Internet access across one seamless network covering all 50 states, as well as assume ownership and management of more than 50 StarNet Points of Presence (POPs), StarNet’s servers, equipment and Network Operations Center (NOC) in Palatine, Ill. US LEC will retain the majority of StarNet’s current staff to ensure uninterrupted technical and support operations.

US LEC Corp.

StarNet Inc.

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