Tucows Inc., a web services provider, yesterday announced that it has signed a definitive agreement with Critical Path, Inc., a provider of messaging solutions for mobile, broadband and fixed-line service providers, to acquire substantially all of Critical Path's hosted messaging assets, including its customer base, hosted messaging communications infrastructure and other related assets, such as goodwill and a software license for Memova Messaging. The acquisition is said to cost up to US $8.0 million in cash plus the assumption of some related contractual liabilities.

Tucows will maintain the hosted messaging data centers in Denver, Colorado and London, England. It will also offer employment to the majority of Critical Path's hosted messaging operations and support teams located in Toronto, Ontario. The acquisition of these assets will be accounted for as a purchase transaction and has been approved by both companies' Boards of Directors. It is anticipated to close January 3, 2006, and is subject to standard closing provisions and conditions.

"With this acquisition, Tucows becomes a leader in hosted email, especially hosted email for Internet service providers and web hosting companies," said Elliot Noss, President and CEO, Tucows Inc. "It is consistent with our strategy to be a leading provider of Internet services to service providers. It will deepen our relationships with existing customers, add a number of new service provider customers and further diversify our revenue streams."

"We believe our plan will result in a seamless transition for our new customers," said David Woroch, Vice President of Sales & Marketing, Tucows Inc. "We intend to grow the hosted email business by providing a greater customer experience through our focus on the needs of our service provider customers and leveraging the features of the Memova Messaging software."