Interpath Acquires Division of Interliant: Solidifies Its Position as ASP Leader

Business Wire, July 24, 2001

Business and Technology Editors

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--July 24, 2001

Enterprise Resource Planning (ERP) Division Gives Interpath

New Midwest Data Center and Dramatically

Expanded Application Portfolio

Interpath, an established, full-service application service provider (ASP), today announced the completion of a deal by which it has acquired the PeopleSoft Enterprise Resource Planning (ERP) hosting and related consulting services business of Interliant, Inc. (NASDAQ: INIT). This acquisition extends Interpath's ASP solution portfolio of premier e-business, e-commerce and CRM business applications and launches the company's expansion into the ERP market by adding hosted PeopleSoft human resources and financial solutions to its offerings.

Interpath has assumed ownership of Interliant's Managed Application Solutions (IMAS) ERP hosting division, based in Columbus, Ohio, and formerly known as reSOURCE PARTNERS. As part of the acquisition, Interpath will take over contractual service of IMAS' ERP hosting client roster along with their Columbus, Ohio data center and support facilities. As a result, Interpath has not only gained the ability to provide its customers with industry-leading PeopleSoft human resources and financial solutions, but also the expertise necessary for their implementation and monitoring. As part of the transaction, Interpath has agreed to offer employment to substantially all of the employees of the ERP hosting business.

"Interpath's mission is to faithfully and proactively provide its customers with the tools they need for success. Our customers can be secure in the knowledge that they can focus on their core competencies utilizing Interpath's scalable skill, support and security. The acquisition of Interliant's PeopleSoft ERP hosting business unit will enable us to do just that," said Joel Schleicher, Interpath's Chairman and CEO. "We have not only added PeopleSoft's best-of-breed solutions to Interpath's application portfolio, we have also acquired a ready-made team for their implementation. Though the PeopleSoft ERP business we have acquired was deemed to no longer fit within Interliant's strategy, Interpath is encouraged that it will quickly be a growth and profit-making element of our overall applications portfolio."

This acquisition also highlights Interpath's counter-cyclical approach to the market. At a time when other technology providers have been forced to cut back in the face of market turbulence, Interpath - with investments from Bain Capital and Progress Energy - has instead chosen to expand. Interpath's sales force has doubled in size in just the past four months, and its infrastructure build-out continues.

Today's announcement comes amid a flurry of similar activity from Interpath. On July 10, the company unveiled its extensive partnership with Deloitte & Touche Outsourcing and in coming weeks additional announcements of other high-profile partnerships and acquisitions will be made.

According to the industry analysts at the Gartner Group, human resources applications from PeopleSoft are among the best-selling of all ASP-related applications. By virtue of this acquisition of a leading hosted services business for outsourced human resources and finance solutions, Interpath has placed itself squarely within one of the market's most desirable and lucrative niches. Interpath's new PeopleSoft applications join its existing close partnerships with leading software companies including Vignette, Microsoft, BroadVision and Pivotal.

"Roughly 80 percent of PeopleSoft's market is made up of companies that report annual revenues of $500 million or more," Schleicher continued. "At Interpath, we consider that sector of the market to be within our sweet spot. There is no question that this acquisition offers a tremendous growth opportunity."

About Interpath

Interpath is an established, full-service Application Service Provider/Application Infrastructure Service Provider. Through a combination of skills, support, security, and stability, Interpath enables customers to be secure in the knowledge they can focus on their core competencies.

Interpath partners with customers to offer application development, integration and hosting solutions and services. Interpath's applications expertise, combined with its state-of-the-art data and operations centers, offers customers a single, high-quality source for application development, management and hosting. The company is based in Research Triangle Park, North Carolina and recently launched Interpath Australia Ltd. in August 2000, after the acquisition of Alta, one of Australia's leading ASPs.

In June 2000, Interpath announced that Bain Capital, a global private equity firm that manages several pools of capital including private equity, high-yield assets, mezzanine capital and public equity with over $12 billion in assets under management, gained majority ownership of the corporation with Progress Energy, Inc. maintaining a minority ownership. For more information about Interpath, visit the company's Web site at: http://www.interpath.net.