Velocity Acquires Lawson- and Kronos-Managed Application Services Business of NaviSite

NEW YORK, Feb. 25 /PRNewswire/ -- Velocity Technology Solutions, Inc., a leader in enterprise software application management, hosting, and consulting services, has acquired the Lawson- and Kronos-hosting business (formerly NetASPx, Inc.) from NaviSite, Inc. (Nasdaq: NAVI). The acquisition makes Velocity the largest provider and clear market leader for Lawson-hosted solutions in North America.

"We are very pleased to welcome to Velocity the customers and employees of NaviSite's Lawson / Kronos application services business.  Together with Velocity, this acquisition facilitates a powerful combination of talented professionals, innovative solutions, and advanced cloud-based technologies for the enterprise software market," said Tom Bruno, President and Chief Executive Officer of Velocity.  "Velocity is extremely well suited to continue providing an outstanding level of service and deliver the personalized care that customers have come to expect.  Velocity has been a business partner with Lawson for more than 20 years.  This transaction expands our role in the marketplace and enables us to achieve the critical mass necessary to accelerate our success."

As part of the transaction, Velocity acquired the SAS70 Type II-certified datacenter in Minneapolis, which ensures uninterrupted service and support to existing NaviSite clients.  This datacenter will extend and strengthen the Velocity On-Demand™ private-cloud architecture, which provides customers with a scalable, secure, and high-availability processing environment and unprecedented control and flexibility over their application software.

"By divesting our Lawson / Kronos practice we will be better able to focus on our core enterprise applications business and accelerate the progress of our NaviCloud suite of solutions.  The proceeds from this divestiture will be used to reduce our debt and will provide us with more balance sheet flexibility in the future." said Arthur Becker, Chief Executive Officer of NaviSite.  "Our goal has always been to provide the highest level of service, superior application expertise, and unparalleled technology to our customers.  We are pleased that these customers will be working with an organization like Velocity that shares those same values"

Velocity is a long-standing business partner with Lawson Software, providing both managed services and professional services.  "Through innovative solution offerings and world-class support we have helped to grow the base of new Lawson customers as well as expand our existing clients' use of Lawson's suite of software," Bruno said. "We have greater – and quicker – access to technological advances and increased availability of new products and services. It all means increased value to our customers, and a stronger financial base for our organization."

About Velocity Technology Solutions

Velocity is a leading application service provider that delivers enterprise software functionality through a secure private cloud platform.  Velocity's clients benefit from hosted, fully managed environments for their ERP and related software applications; guaranteed availability, security and compliance; and certified consulting resources.  Velocity's proprietary delivery system for software hosting, Velocity On-Demand™, brings scalable computing and fully managed services for mission critical IT systems and sensitive data.  Velocity is headquartered in New York City, with offices in Minneapolis, Tampa and London, Ontario.   For more information on Velocity services please visit www.velocityus.com.

About NaviSite

NaviSite, Inc. (NASDAQ: NAVI) is a leading worldwide provider of enterprise-class, cloud-enabled hosting, managed applications and services. With over 20 years experience, the Company provides a full suite of reliable and scalable managed services, including Applications Services, industry-leading Enterprise Hosting, and  Managed  Cloud Services for enterprises looking to outsource IT infrastructures and lower their  capital and operational costs. Over 1,400 customers depend on NaviSite for customized solutions, delivered through a global footprint of over a dozen state-of-the-art data centers supported by approximately 650 professionals. For more information on NaviSite services, please visit www.navisite.com.

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Safe Harbor Statement

This release contains forward-looking statements that address a variety of subjects, including NaviSite's expected future operating and financial results, such as profitability, revenue growth and EBITDA, the success and performance of our product and service offerings and our strategic business plans for growing its customer base and increasing sales. All statements other than statements of historical fact — including, without limitation, those with respect to our goals, plans and strategies set forth herein — are forward-looking statements. The following important factors and uncertainties, along with general economic conditions, changes in economic conditions and others, could cause actual results to differ materially from those described in these forward-looking statements. Our success — including our ability to improve our gross profit, to improve our cash flows, to expand our operations and revenue and to reach and sustain profitability — depends in part on our ability to execute on our business strategy and the continued and increased demand for, and market acceptance of, our products and services. We may not remain compliant with our agreement with our senior secured lenders, including financial covenants. Our financial forecasts may not be achieved, including those as to expected EBITDA and revenue. We may be unable to raise the necessary funds to meet our payment obligations to our lending group under our senior secured credit facility and other creditors. We may not be able to expand our operations in accordance with our business strategy. We may experience difficulties integrating technologies, operations and personnel in accordance with our business strategy. Our products, technologies and resources may not successfully operate with the technology, resources and applications of third parties. We derive a significant portion of our revenue from a small number of customers, and the loss of any of those customers could significantly damage our financial condition and results of operations. Competition has increased, and technological changes made, in the markets in which we compete. For a detailed discussion of cautionary statements that may affect our future results of operations and financial results, please refer to our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10 K and our quarterly reports on Form 10 Q. Forward-looking statements represent our current expectations and are inherently uncertain. We do not undertake any obligation to update forward-looking statements that we make. All logos, company and product names may be trademarks or registered trademarks of their respective owners.

SOURCE Velocity Technology Solutions, Inc.