Hostway Raises $110 Million From Consortium of Investors to Support Continued Growth

Vote of Confidence in Business Model and Prospects for Further Growth

Chicago, Illinois, March 29, 2010 — Hostway Corporation, a leading global provider of Web hosting and cloud hosting services, today announced the closing of a $110 million debt and equity financing with a consortium of investors to support its continued growth plan. The transaction was led by Veronis Suhler Stevenson along with Fortress Capital, Regiment Capital and Phoenix Life. Specific terms of the deal were not disclosed.

Hostway's service offerings range from small business Web hosting solutions to managed dedicated server hosting for medium to large enterprises. Additionally, in 2009, the company launched cloud hosting offerings.

Hostway has garnered industry-wide recognition and praise for ServicePlex, an online service delivery portal developed internally to enable a seamless customer experience. Hostway has also partnered with telecom companies, cable operators and large retailers to deliver fully private-labeled online services to their customers.

"Since our founding in 1998, we have continuously sought ways to deliver more value to our customers by investing in our people, technology and infrastructure. As a result, we have built a solid platform for growth. In the next stage of our history, in partnership with our new investors, we aim to accelerate the pace of becoming the leading provider in the fast-growing online services market," said Lucas Roh, CEO and co-founder of Hostway Corporation.

"We are excited by the opportunity to partner with Hostway and invest in this vibrant and growing industry," said George Cole, partner, Structured Capital Funds at Veronis Suhler Stevenson. "With a sound infrastructure in place and forecasted growth far exceeding projected GDP growth annually in the managed hosting, collocation and cloud computing segments over the next three years, Hostway is well positioned to capture further market share."

Houlihan Lokey served as exclusive financial advisor to Hostway. "We are excited that our financing process yielded a sophisticated group of financial partners that will add value during the next growth phase for Hostway," said Chris Wilson, managing director and head of the Houlihan Lokey Media & Telecom Group.