USinternetworking Gains $100 Million Vote Of Confidence

 
 
By Mel Duvall  |  Posted 2001-10-11 Email Print this article Print
 
 
 
 
 
 
 

USinternetworking has received a $100 million round of investments, which the company hopes will put an end to questions in the marketplace about its financial viability.

USinternetworking has received a $100 million round of investments, which the company hopes will put an end to questions in the marketplace about its financial viability. With dozens of application service providers (ASPs) going under this year, USi said it has been hurt by concerns about its own financial status. USi CEO Andrew Stern said that potential customers have been reluctant to place their mission-critical applications in the Annapolis, Md., firms hands when even once blue-chip Internet firms such as Excite@Home and Exodus Communications are failing.
"What this investment means is USi now has the wherewithal to get through this tough period and emerge with a clean balance sheet," Stern said. "It also provides confidence to our current customers and new customers in our long-term viability."
The funding round is led by Bain Capital Partners. It is contingent on a number of conditions being met, including a balance sheet restructuring, and final legal and accounting due diligence. Bain, which manages $12 billion in assets, has made big bets on the future of the ASP industry. A year ago, it invested another $100 million in Interpath, an ASP that specializes in hosted customer relationship management, e-commerce and human resources applications. Interpath has been using those funds to snap up weaker competitors at bargain prices. Stern said USi has no intention of going on a similar buying spree. "The size of the investment was designed to get us to break even, and leave a substantial buffer," he said.
 
 
 
 
Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.

 
 
 
 
 
 
 

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