PacketExchange Acquires XchangePoint and Gains New Investment

LONDON--()--Jan. 17, 2005--PacketExchange, the Internet peering innovator, today announced the acquisition of XchangePoint, the pan-European metro area interconnectivity company, for an undisclosed sum. The acquisition, which follows Bank of Scotland Equity's (HBOS) $3 million investment in PacketExchange in November 2004, forms part of the company's stated aim of accelerating its growth by expansion into continental Europe.

As a result of the deal, PacketExchange expands its direct sales presence in Germany and the Netherlands, and acquires access to XchangePoint's 170-strong customer base. The company's product offering is strengthened with the addition of XchangePoint's metropolitan area services to PacketExchange's international services. It offers customers Ethernet alternatives to traditional Internet services and greatly improved Internet performance. PacketExchange can now offer 25% of all available routes on the global Internet via its own network.

"To maintain our record of 100% year on year growth, our strategy is to combine organic growth with targeted acquisitions," said Kieron O'Brien, chief executive of PacketExchange. "By combining the XchangePoint and PacketExchange product ranges, adding their metropolitan area connectivity services to our wide area portfolio, we can deliver greater depth in terms of both service and geography to customers' peering needs. In addition, it expands our presence into new European cities. This transaction is incremental to our own new product development and international expansion."

The deal is underpinned by new investment in PacketExchange from existing XchangePoint investors. This forms part of the continued drive for new investment in PacketExchange. "The proven growth potential of PacketExchange, the major factor behind the HBOS investment, will enable us to continue to generate further new investment to achieve our stated goals," continued O'Brien.

Notes to editors

PacketExchange

PacketExchange provides faster, cheaper and more cost effective Internet connectivity and data communications to service providers and corporate users. The company has developed innovative services to minimise the inefficiencies of the public Internet, by enabling customers to create direct Internet connections with one another, thus increasing the speed of communication, lowering costs and significantly improving quality. Launched in 2001, PacketExchange was cash-positive after 22 months and has been profitable ever since. The company's turnover for the last financial year will be in excess of $10 million and is expected to more than double again in the coming year. Its clients include Microsoft, Telewest, KPN, Blue Square and Yahoo!

http://www.packetexchange.net

XchangePoint

XchangePoint is dedicated to offering its customers Ethernet interconnectivity in metropolitan areas, connecting the neutral co-location facilities within Europe's cities. The company offers services in London, Hamburg, Frankfurt and Amsterdam. Using the latest DWDM (wave division multiplexing) and Ethernet switching technology, XchangePoint offers its customers the flexibility to mix and match private interconnect and shared peering services as their needs change, improving efficiency, reducing the overall cost of interconnectivity and providing the customer with a highly resilient network.

Contacts

Splash Communications
Debbie Smith, +44 (0)1225 348012
dsmith@splashcommunications.com
Mobile: +44 (0)7778 790015

Contacts

Splash Communications
Debbie Smith, +44 (0)1225 348012
dsmith@splashcommunications.com
Mobile: +44 (0)7778 790015