Cloud Services M&A: Datalink Buys Midwave for $18 Million
Data center service provider Datalink acquired fellow Minneapolis-based services and solution provider Midwave for $17.6 million earlier this week. It seems Datalink is expecting Midwave’s managed services savvy to bolster its deep-dive into the cloud market, while also boosting its bottom line to the tune of $65 million more in revenue per year.
Thanks to this acquisition, Datalink said it’s going to close out the year with a $400 million run rate and more than 400 employees — good statistics for a data center services provider that’s trying to move into the cloud services market. The deal is expected to finalize within the next 90 days.
Paul Lidsky, president and CEO of Datalink, laid it all out in a prepared statement:
“Our expanded footprint in the Twin Cities makes us the dominant data center services and infrastructure provider in the region. This acquisition doubles our Cisco technology and services revenues, expands our managed services portfolio with the addition of a data center infrastructure monitoring service, adds an established security practice including product, services and consulting and doubles the size of our consulting services team.”
In that same announcement, Datalink upped its guidance for Q3 2011 to $88 million to $90 million, which would represent a sizable increase over 2010’s third quarter of $69.2 million. The major reason for the increase, according to the press release, is an ever-rising demand for cloud infrastructure solutions.
Interestingly, the last time The VAR Guy heard from Datalink, it was late 2009 and it had acquired Incentra’s reseller business, giving the company its first foothold into virtualized data center solutions — an important early step into the cloud.
We’ll be keeping a close eye on Datalink as it joins its fellow data center service providers in building out its cloud play, so keep watching TalkinCloud for updates.