MindSpring to Pay $245 Million for Netcom’s Internet Subscribers

Internet service provider MindSpring Enterprises Inc. said Wednesday that it will purchase about 400,000 individual Internet subscribers from Netcom for about $245 million. The move will bring MindSpring’s subscriber base to more than a million by the end of February, when the deal is expected to close.

Atlanta-based MindSpring will pay $215 million in cash and $30 million in stock for the individual accounts and 3,000 direct-access business accounts and 18,000 Web-hosting accounts from San Jose-based Netcom, a wholly owned subsidiary of ICG Communications Inc., based in Englewood, Colo. ICG will keep the Netcom network infrastructure and MindSpring will handle the accounts and pay ICG for carrying the traffic.

Among Internet service providers, America Online leads by far with 15 million subscribers, followed by Microsoft’s MSN with 2 million, AT&T;’s WorldNet service with 1.4 million, and Pasadena-based EarthLink Network Inc. and MindSpring, both with about 1 million.

“There’s four of us in a hunt for No. 2,” said MindSpring Chief Executive Charles Brewer.

MindSpring’s stock rose $8.56 to close at $75.13, and ICG shares fell 19 cents to $22.94. Both trade on Nasdaq.