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Houston's largest Internet service provider was purchased this week by Dallas-based Internet America Inc. in a stock deal valued at $32 million.
Internet America will issue 2.4 million shares of common stock in exchange for all the outstanding stock of privately-held PDQ.net Inc. - probably best known for its ads featuring Houston Rockets coach Rudy Tomjanovich.
Local ISP professionals say the acquisition could be the first in a string of consolidation deals triggered by a public-company shopping spree that has been launched in Houston during the last few months. Each of the largest local ISPs have been approached about selling their operations by at least six public companies and four potential roll-ups, sources say.
The Internet America acquisition, which would give it a total of 145,000 subscribers, is its second purchase in Houston in the last three months. The newly public company bought Neosoft Inc. in June for $7.3 million in cash. Neosoft's corporate customer base brings in about $4 million in revenue annually.
The PDQ.net deal gives Internet America an additional $10 million in annual revenue on the books, with 80 percent of that coming from individual customers and 20 percent from businesses. The subscriber break down is similar to that of Internet America.
Mike Maples, president...