iWeb Could Soon be Acquired for $1.50 per share

(Ping! Zine Web Hosting Magazine) – iWeb Group Inc. has announced that it has received from a private equity fund (the “Fund”) a non-binding proposal to acquire, together with financial partners, all of the outstanding common shares of iWeb at a price of $1.50 in cash per share, and has agreed to grant exclusivity to the Fund until May 3, 2011. The transaction contemplated by the non-binding proposal, if completed, will lead to iWeb’s privatization.

The Fund has until May 3, 2011 to present a definitive agreement at $1.50 per share to complete the transaction.

The founders of iWeb, Éric Chouinard and Martin Leclair, and Investissements Webdépart Inc., an entity controlled by Messrs. Chouinard and Leclair, who hold in the aggregate approximately 54.2% of the outstanding common shares of iWeb, have entered into a lock-up agreement with the Fund whereby they have agreed to vote their shares in favour of the transaction contemplated by the non-binding proposal. As part of the transaction, the founders would reinvest a portion of the proceeds received by them in securities of iWeb. The lock-up agreement expires on June 2, 2011.

The purchase price of $1.50 in cash per share contemplated by the non-binding proposal would value iWeb’s equity at approximately $47 million. The proposed purchase price represents a premium of 25% over the closing price of $1.20 per share on March 3, 2011 and a premium of 31.6% over the 20-day volume weighted average trading price of $1.14 per share on the TSX Venture Exchange for the period ended on March 3, 2011.

The non-binding proposal is subject to due diligence, execution of definitive legal documentation and other customary conditions. There is no assurance that the negotiations with the Fund will result in a binding offer being made for iWeb’s common shares. See “Forward-looking Information” below.

iWeb has agreed to pay to the Fund an amount of $3 million in the event that the Fund and its financial partners are ready to enter into a definitive agreement with respect to the transaction at a price of $1.50 in cash per share within the exclusivity period, and iWeb does not enter into such definitive agreement prior to the end of the exclusivity period. In addition, in those circumstances, the Fund and its financial partners will have the right to match any alternate transaction having a price higher than $1.50 per share that is proposed within six months from the expiration of the exclusivity period.

iWeb intends to make no further announcements or comments with respect to the foregoing unless the circumstances so warrant.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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