Sandpiper, Digital Island Merge

Internet infrastructure companies Digital Island Inc. and Sandpiper Networks Inc. Monday announced plans to merge in a stock swap valued at about $621 million.

Sandpiper shareholders will receive 1.07 shares of Digital Island (ISLD) for each share they own. The deal must still receive shareholder approval, although officers directors and affiliates holding more than 50 percent of Sandpiper and 45 percent of Digital Island shares have already indicated they will support the deal.

Digital Island President and Chief Executive Officer Ruann Ernst will be the CEO of the combined company. Leo Spiegel, Sandpiper’s president and chief executive officer, will become president.

The companies said the merger will integrate content delivery, hosting and network services to support centrally controlled and secure transactions as well as speed the delivery of content.

“Providing the best possible Web site experience is critical to building and retaining brand loyalty. Together, Digital Island and Sandpiper Networks will empower our customers to attract and grow their revenues by delivering excellent end-user experiences — anywhere, anytime,” Ernst said.

Spiegel said the two companies share a common vision on how to best distribute computing intelligence and deliver the best user experience.

“Now we can even more effectively fulfill our vision by combining our world-class engineers, networks and technologies to better meet the needs of our global customers,” he said.

The combined company will have more than 100 customers, including a number of technology leaders and Web publishers.