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Press Release

Telephone and Data Systems to acquire OneNeck® IT Services Corporation

June 28, 2011

Largest hosted and managed services transaction to date demonstrates commitment to rapidly growing industry.


MADISON, Wis. (June 28, 2011) - Telephone and Data Systems, Inc., (NYSE: TDS, TDS.S) parent company to TDS Telecommunications Corp., announces it will acquire OneNeck® IT Services headquartered in Scottsdale, Ariz. for a purchase price of $95 million. OneNeck, which generated annual revenues of $37 million in 2010, will be a subsidiary of TDS Hosted & Managed Services, LLC (TDS HMS).


OneNeck is a premier provider of hosted application management and managed IT hosting services to middle market businesses. The firm specializes in supporting Enterprise Resource Planning (ERP) applications. OneNeck's managed hosting services include management and monitoring of client IT infrastructure, both client-owned and OneNeck provided. The firm offers network management, disaster recovery, security administration, and end-user support on a 24/7 basis.


The company has operations centers in Tempe and Gilbert, Ariz., and significant customer engagements in Somerset, N.J., Dallas, Texas, and Kansas City, Mo.


“Our strategy is to have a robust suite of offerings, including colocation, managed services, hosting, cloud, and solutions delivery," states William Megan, president of TDS HMS and executive vice president at TDS Telecommunications Corp. "OneNeck brings sophisticated hosted application management and managed hosting to our product portfolio that will enable us to leverage the data center assets recently acquired with VISI and TEAM."


OneNeck operates 12,000 sq. ft. of data center space in Ariz. In addition, they have a strategic partnership with Datapipe to access data center space in Somerset, N.J., allowing them to service numerous east coast customers. OneNeck is home to 230 employees who hold more than 300 technical certifications across 32 vendors.


"This is an exciting opportunity for both our customers and employees," Chuck Vermillion, OneNeck CEO and founder remarks. "Being a part of TDS will enhance our development of innovative cloud solutions and enable us to accelerate our overall growth strategies. Our unique culture and undying commitment to customer satisfaction remains unchanged and blends perfectly with TDS' values. We are delighted to join with TDS."

Frequently recognized in the industry for its business growth, customer service, and technical expertise, OneNeck ranks No. 3667 on Inc. Magazine's 5000 list and No. 50 on its Top Companies in the Phoenix metro area (based on OneNeck's 44 percent three-year growth rate). The company has been repeatedly selected by the Black Book of Outsourcing as the Number One Mid-Market Service Provider of Enterprise Resource Planning and Hosted Application Management worldwide.


In recent months, TDS Hosted & Managed Services, LLC has made major advancements to position itself in the fast-growing hosted and managed services arena by adding VISI Incorporated in March 2010 and TEAM Technologies, LLC in Dec. 2010 to its portfolio of operations.


"OneNeck has mature operational tools and capabilities, plus a strong management team and distinctive customer base that will provide a platform for growth of TDS' HMS initiatives, especially in the middle market segment," adds Megan.


TDS Telecommunications Corp. maintains management responsibility for the data center and hosting operations of VISI Incorporated and TEAM Technologies LLC through the newly formed TDS Hosted & Managed Services, LLC.


The transaction is expected to close on or about July 1, 2011. Stifel Nicolaus Weisel served as exclusive financial advisor to OneNeck IT Services in the transaction.


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