Interpath Receives $100 Million Equity Investment In Spin-Off Deal Between Bain Capital And CP&L

Business Wire, May 3, 2000

Business/Technology Editors

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--May 3, 2000

Bain Capital and Carolina Power & Light Each Invest $50 Million; Bain

Takes Ownership And CP&L Retains Minority Stake In The Full-Service

ASP

Interpath Communications, Inc.--a wholly-owned ASP subsidiary of Carolina Power and Light (NYSE:CPL)(CP&L)--today announced that it will change ownership and receive a $100 million equity investment in a spin-off deal between Boston-based Bain Capital, Inc. (a $7 billion private equity fund) and CP&L.

A move designed to unlock the full-service Application Service Provider's (ASP) market value, CP&L and Bain will each invest $50 million for a total of $100 million of new equity to aggressively grow Interpath's ASP business. Bain will provide strategic and operational expertise to enable Interpath to leverage its leadership position in the dynamic ASP marketplace. Upon completion of the transaction, Bain will own 65% and CP&L will own 35% of Interpath. CP&L will retain the fiber optic network assets owned by Interpath, about 50 employees and its 10% limited partnership interest in the BellSouth PCS business. The remaining 450 employees will be retained by the Bain-owned Interpath to service the company's ASP and Data Services operations.

"This deal allows Interpath and its employees to have a singular focus: selling, delivering and supporting our world-class e-business applications and services to the mid- to large-size enterprise marketplace," said Michael Fox, interim president and CEO of Interpath. "Bain brings a wealth of knowledge and expertise to our board that will assist us in growing the company and fully recognizing our value in this rapidly-expanding market. As a pioneer and veteran in the ASP market, Interpath is very excited about taking its business to the next level with such a credible and capable partner."

Over the past fifteen years, Bain has established a prolific track record in the public equity capital markets having completed IPOs for its portfolio companies, which today have combined market capitalization exceeding $25 billion. Bain has significant experience investing in technology companies including Internet infrastructure, content and services companies. Recent technology and telecom investments include Double Click, eCredit.com, SEAT, USLEC, Therma-wave, Integrated Circuit Systems, Net Library and many others.

"We are extremely excited to back the outstanding management team at Interpath to build upon the leadership position they have created in the dynamic ASP marketplace," said Andrew Balson, a principal with Bain Capital. "The substantial capital commitment being made by CP&L and Bain Capital will enable the Interpath team to create a long term winner in the ASP market."

Formed in January 1998, Interpath offers a variety of eCommerce and enterprise applications based on applications from Vignette, SAP, Microsoft, Netscape and Broadvision. The full-service business addresses e-business and e-readiness consulting, full design and development services, and 24x7 mission-critical application management and hosting. Interpath will continue to support those applications via its state-of-the-art Interpath Operation Center (IOC).

Since the start of 2000, Interpath has been signing up customers at a rapid pace, continuing to gain traction in the enterprise ASP marketplace. New ASP agreements--including the deals with Sagent Technology, Ericsson, Centura Bank, First Union Mortgage, MBNA, eIRAnet and mainstreetweek.com--totaled more than $7 million in Q1 2000

About Interpath

Interpath is a full-service ASP offering a broad range of managed application and consulting services. Interpath offers customers comprehensive solutions of mission critical services including eCommerce and ERP application development and management and data services. Interpath's applications expertise, combined with its state-of-the-art data and operations centers, offers customers a single, high-quality source solution for application development and management.

About Bain Capital

Bain Capital is one of the most experienced and successful private equity investors in the United States. The firm's principals have extensive experience working with companies in a wide range of industries. Since its founding in 1984, Bain Capital has invested in more than 150 companies and currently manages approximately $7 billion of capital. Bain Capital's investment strategy is to invest in or to acquire businesses in partnership with exceptional management teams and build the long-term value of those businesses.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Securities Exchange Act of 1934. The forward-looking statements are subject to various risks and uncertainties. Discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations may include factors that are beyond the company's ability to control or estimate precisely. Factors include, but are not limited to, actions in the financial markets, weather conditions, economic conditions in the company's service territories, fluctuations in energy-related commodity prices, conversion activity, other marketing efforts and other uncertainties. Other risk factors are detailed from time to time in the company's SEC reports.