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USWeb to acquire networking firm

USWeb signs a definitive agreement to acquire New York-based Gray Peak Technologies (GPT) in a deal valued at between $80 million and $100 million.

In its largest acquisition to date, USWeb, an Internet services firm, announced today that it has signed a definitive agreement to acquire New York-based Gray Peak Technologies (GPT) in a deal valued at between $80 million and $100 million.

The company also unveiled its acquisitions strategy, and plans for integrating the 27 firms it has acquired during the last 18 months. The GPT transaction involves acquisition of all GPT stock and options in exchange for USWeb stock, the company said.

USWeb also said today that it is on target to meet its second-quarter projections. Analysts are expecting the company to report a loss of 5 cents a share for its June quarter, according to First Call.

But the company also indicated that the acquisition will improve its financial prospects for the rest of the year, and noted that analysts expect it to turn cashflow-positive by the fourth quarter.

Longer term, the company indicated that GPT's recurring revenues will boost USWeb's revenue, which currently comes primarily from specific projects that don't necessarily create repeat revenue.

The company's stock jumped 1.81, to 23.38, today, up more than 8 percent from yesterday's close of 21.56. USWeb shares, however, are off almost 40 percent from their high of 38.75, struck in April.

USWeb said that today's acquisition expands its breadth of offerings in Internet network engineering, network management, network integration, network security, and voice over IP.

"The Internet, frankly, intersects every company," Joe Firmage, USWeb chairman and chief executive, said in a conference call. "With this acquisition, USWeb will be able to build, design, operate and maintain end-to-end intranets, extranets, and enterprise networks. This is no aspect of a enterprise network that we cannot support."

For the first time in nearly a year, the company also unveiled today its "blueprint for [the] future," which outlines three core areas of focus. The three focus areas are: studio, technologies, and strategies.

The studio group will focus on online brand development, user experience, and design services. The technologies group will provide application development, e-commerce solutions, network implementation, and database integration. The strategies group will assist clients with business plan development.

The GPT acquisition forms the Network Solutions Practice within the technologies division. Closing of the transaction is subject to regulatory clearance and other terms.

USWeb employs more than 1,000 people around the world.