Hostway Continues Growth Strategy With Acquisition of Ontario Web Hosting Business

Chicago, IL—January 7, 2004—Hostway Corporation, a global leader in Web hosting and managed Internet services, today said it has solidified its leadership of the Canadian hosting market by acquiring the customer base of Cephren Hosting, a division of Cephren Communications, Brampton, ON.

As a result of the agreement, Cephren exits the hosting business and transfers its hosting customers to Hostway's Canadian subsidiary, NetNation Communications, Vancouver, BC, which serves the former Cephren customers from its Vancouver data center. Financial terms of the agreement were not disclosed. Both Hostway and Cephren are privately held companies.

"The Web hosting market is highly fragmented," said Lucas Roh, Founder, President and CEO of Chicago based Hostway Corporation. "We believe there is considerable potential in this marketplace for efficient companies that can manage the technology, profitably serve customers and continue to innovate."

"Consumers and business customers want quality solutions at a good value. They don't want to hassle with back office technology, they simply want results," added Roh. "Our acquisition of Cephren is another step toward our goal of building a global managed technology services organization that can meet the needs of our customers anywhere in the world."

Hostway has compiled a successful record of integrating acquired companies smoothly and delivering superior service to customers of the acquired companies. In addition to NetNation, which it acquired in 2003, Hostway's recent acquisitions have included GlobalHost, Sydney, Australia; Iarna, London, UK; and Neutelligent, Tampa, Fla.

Hostway said Cephren's customers will receive superior value and customer support from NetNation, Canada's leading provider of Internet hosting services.

The acquisition immediately enables all Cephren customers to use any of Hostway's and NetNation's services, including shared and dedicated Web hosting and various other managed Internet services. Cephren customers also will benefit from the global network of hosting centers that Hostway operates around the world.

Cephren said the transaction enables the company to focus on its core business of construction. Cephren is a leading builder of technology data centers and office complexes in Canada.