Web.com, an online provider of Internet services for small and medium-sized businesses, has agreed to pay about $560 million for privately held marketing and domain company Network Solutions.

Shares of Web.com rose nearly 30 percent after hours following the announcement of its largest acquisition to date. The company had a market capitalization of $251.72 million at Wednesday's close.

We have known Network Solutions for 12 years, and they were one of our first partners, and they were one of our most successful partners ever, David Brown, chairman and chief executive of Web.com said.

The deal comes a month after Web hosting company The Go Daddy Group Inc agreed to be bought by a private equity consortium led by KKR and Silver Lake for $2.25 billion, including debt.

As opposed to Go Daddy, which is very retail oriented, they have consumers and some small businesses, we are pure-play small business oriented and that is how we project ourselves, Brown said.

Under the agreement, Web.com will pay Network Solutions $405 million in cash and issue 18 million shares of Web.com common stock, in addition to refinancing $204 million in existing Network Solutions net debt, Brown said. The company is based in Jacksonville, Florida.

After closing the deal, the combined company is expected to have net debt of approximately $740 million, which will represent approximately 5 times net debt to 2012 adjusted EBITDA (earnings before interest, tax, depreciation and amortization).

The cash portion of the acquisition will be funded with new debt commitments, consisting of $750 million of new credit facilities, as well as an initially unfunded $50 million revolver.

Brown said financing was being led by JPMorgan Chase & Co, and includes Deutsche Bank, Goldman Sachs & Co and SunTrust Robinson Humphrey Inc, Brown told Reuters.

At the close, General Atlantic and other current Network Solutions shareholders are expected to own approximately 37 percent of Web.com.

GA evaluated a lot of options. They have effectively gone public through this transaction, Brown said.

Anton Levy, a managing director of General Atlantic and principal stakeholder in Network Solutions, will receive a board seat at Web.com, Brown said.

The deal is expected to close in the fall of 2011.

Wells Fargo Securities, BofA Merrill Lynch and JPMorgan advised Web.com, while Cooley LLP provided legal counsel. Goldman Sachs and Deutsche Bank acted as financial advisors to Network Solutions and Paul, Weiss, Rifkind, Wharton & Garrison LLP provided legal advice.

(Reporting by Nadia Damouni)