Local application service provider Interpath will merge with rival ASP USi of Annapolis, MD, in a restructuring deal involving an investment from Bain Capital of Boston.
The deal will mean the loss of local headquarters for Interpath, founded in 1993 as part of Capital Broadcasting and one of the first Internet technology companies in the Triangle. Interpath’s Morrisville operations will become the southern outpost for the new company, which will remain based in Maryland.
Andrew Stern, chief executive officer of USi, will become chairman and CEO of the combined business. Interpath CEO Joel Schleicher will be on the board of directors of the new company but will not have a direct management role. The name of the new business has not been decided.
Job cuts among the 130 employees at Interpath’s local offices will likely result from the merger, the company said. Interpath also will likely shed a 90,000-square-foot data center in RTP as part of the consolidation, and will keep the consulting group of about 20 employees that handles Interpath’s software application management services.
The merger is part of a restructuring plan by USi, which was put in place on Tuesday. USi also received an investment of $81.25 million from an affiliate of Bain Capital, a global private equity firm with over $12 billion in assets under management. Bain Capital has a controlling stake in both USi and Interpath.
Together, the two companies will form the largest enterprise ASP, with over 130 customers and combined revenues of nearly $150 million in 2001.