FiberNet Telecom Group, Inc., a leading provider of metropolitan connectivity, announced today that it has entered into a definitive agreement to acqu...

FiberNet Telecom Group, Inc., a leading provider of metropolitan connectivity, announced today that it has entered into a definitive agreement to acquire substantially all of the assets of gateway.realty.new jersey.llc, also known as Gateway Colocation. Gateway Colocation operates a communications hub and colocation facility located at 165 Halsey Street in Newark, New Jersey.

FiberNet regards 165 Halsey Street as the premier carrier hotel in New Jersey and one of the leading carrier hotels in the greater New York metropolitan area, offering the geographic diversity and redundancy that carriers require for their network assets. Gateway Colocation’s 49,000 square foot colocation facility is approximately 60% occupied by over 25 carriers, Internet service providers and cable companies.

FiberNet is currently a customer of the facility, and, consequently, the facility already has connectivity to FiberNet’s metropolitan transport networks and other carrier hotel locations. The transaction has been structured as an acquisition of assets, and the purchase price to be paid at closing will consist of 2.9 million shares of FiberNet’s common stock, valued at approximately $3.8 million, and $170,000 in cash. The purchase agreement also includes an “earn-out” payment based upon future revenues earned at the facility during a particular period subsequent to closing. The “earn-out” payment, if payable, will be paid in shares of common stock. As of October 31, 2003, Gateway Colocation had total assets of approximately $5.1 million, and for the ten months ended October 31, 2003, Gateway Colocation generated approximately $1.9 million in revenues. The acquisition is expected to close, subject to certain conditions customary for a transaction of this type, no later than January 31, 2004.

Michael S. Liss, President and Chief Executive Officer of FiberNet, said, “This strategic acquisition expands our footprint in this key carrier hotel, where we already have a presence. We believe that there is an opportunity for FiberNet to fill the vacant colocation space in the facility with one or more customers seeking fully redundant space outside of New York City. Additionally, we intend to gain additional transport revenues from other customers of the facility and tenants of the building, leveraging the communications hub infrastructure that we are acquiring.”

Oskar Brecher, a founder of Gateway Colocation, stated, “The transaction is consistent with the emerging consolidation of telecom and data networking businesses that have survived the earlier difficulties of this sector. We believe that offering customers both colocation facilities and transport with a broad footprint generates tangible value. We are thrilled to join with FiberNet to provide our customers with a much broader service offering, both geographically and in terms of network capabilities.” Upon the closing of the transaction, Mr. Brecher will become a member of the board of directors of FiberNet.


About FiberNet
FiberNet Telecom Group, Inc. deploys, owns and operates fiber-optic networks designed to provide comprehensive broadband connectivity to other telecommunications service providers for their data, voice and video transmissions. The Company’s networks provide an advanced, high bandwidth, fiber-optic solution to support the demand for network capacity and to facilitate the interconnection of multiple carriers networks. FiberNet’s primary business is to provide optical and electrical broadband circuits within and between carrier hotels, which are industrial buildings where service providers house their communications equipment to exchange and route communications traffic.

FiberNet currently operates primarily in the two gateway markets of New York and Los Angeles, focusing its services in the local loop of major metropolitan areas.

For more information on FiberNet, please visit www.ftgx.com