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NaviSite, Inc., which specializes in managed hosting and managed application services, has rejected an unsolicited takeover offer from Atlantic Investors. However, NaviSite left the door open for additional strategic alternatives. Here are some quick details, plus some background on additional managed services M&A activity.
NaviSite received the unsolicited takeover bid on July 12. Atlantic Investors offered to buy outstanding NaviSite shares for $3.05 per share. NaviSite on Aug. 6 essentially said “Thanks but no thanks.” According to an official company statement:
“NaviSite today announced that the Special Committee (the “Committee”) of the Board of Directors has unanimously rejected the July 12, 2010 unsolicited, conditional proposal by Atlantic Investors, LLC to purchase all of the outstanding shares of common stock of NaviSite not owned by Atlantic for $3.05 per share. The Committee will continue to consider strategic alternatives available to NaviSite, including maintaining NaviSite as a standalone public company. NaviSite does not intend to disclose developments with respect to any consideration of strategic alternatives unless and until the Committee and the Board of Directors have approved a specific course of action.”
This is a tricky time for NaviSite.
On the upside, the company is attempting to position itself as a leader in some super-hot growth markets, including managed hosting and cloud computing. Plus, NaviSite has been hosting Oracle-related applications since around 1997. And NaviSite recently earned Platinum Partner status within the Oracle PartnerNetwork (OPN) Specialized partner program.
On the downside, NaviSite has been a company in transition — shedding three assets in its third quarter. Total recurring hosting revenue was $31.0 million in Q3, up only about 4 percent from Q3 2009.
We’ll be watching to see if Atlantic Investors sweetens its big for NaviSite. We’re also checking around to see if any other bidders are waiting in the wings.
Deals Getting Done
Meanwhile, some managed hosting and MSP-related deals are moving forward. Three prime examples:
The Planet and SoftLayer, two major hosting providers, are negotiating to complete a merger by Q4 2010.
White Glove Technologies last week acquired RIATA Technologies to form a large MSP in Texas.
I hear Cogent Growth Partners, which assists MSPs with pre- and post-merger management, consulted on a recent M&A deal and I hope for more details soon.
I also need to check in with MSPs regarding recent valuations. I’ll be back online when I’ve got more to share.
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