Interland Tuesday said it has dropped its bid to acquire Web hosting assets from telecom provider e.spire Communications.
Interland, based here, last week confirmed negotiations to purchase FloridaNet and CyberGate, the Web hosting subsidiaries of Herndon, Va.-based e.spire.
"While we did believe the accounts could be a good strategic fit for Interland, at the current bid price, along with the associated liabilities, we do not feel the acquisition would provide an acceptable rate of return for our shareholders," said David Buckel, CFO of Interland, in a statement.
The hosting provider plans to continue its search for suitable acquisitions, he said.
E.spire, which filed for Chapter 11 bankruptcy protection on March 22, said last week that the leading bid of $21 million for certain assets of CyberGate had been approved by the U.S. Bankruptcy Court. The name of the leading bidder was not disclosed.
During a first-quarter earnings call with financial analysts last month, Interland Chairman and CEO Joel Kocher said the company plans to grow through acquisitions. In October, Interland acquired Web hosting assets from Interliant, a Purchase, N.Y.-based ASP. Terms of the deal were not disclosed.
Shares of Interland traded down 9 cents at $2.16 Tuesday morning.