Cloud Services Provider Acquisition: Internap Buys Voxel

January 4, 2012

2 Min Read
Cloud Services Provider Acquisition: Internap Buys Voxel

By samdizzy

voxel internap

Internap Network Services has acquired Voxel Holdings, the cloud services provider (CSP), for $30 million plus a potential $5 million earn out over the next two years. The deal combines Internap’s IT infrastructure platform with Voxel’s hosting and cloud services portfolio. But can Voxel jumpstart Internap’s growth?

The Internap-Voxel deal kicks off 2012 much in the way 2011 started — when a range of telecom and broadband services providers acquired cloud services providers. Noteworthy cloud services provider (CSP) combos from 2011 included Verizon buying Terremark, Time Warner buying NaviSite, and CenturyLink buying Savvis.

Buying Voxel’s Business

Internap, meanwhile, closed the deal to buy Voxel on December 30, 2011. Voxel, headquartered in New York City, has roughly 50 employees and more than 1,000 cloud services customers across North America, Europe and Asia.

According to a prepared statement:

“The combination significantly enhances Internap’s flexible IT Infrastructure platform with the addition of Voxel’s dedicated hosting and cloud products. Voxel’s offerings are highly complementary to Internap’s existing portfolio and provide a level of automation and self-service that will be available immediately to Internap’s customer base. Voxel also extends Internap’s addressable market, enabling the company to serve early- to mid-stage IT Infrastructure customers seeking dedicated hosting services…”

It sounds like Voxel was up for sale. The company was backed by Seaport Capital in New York. And DH Capital served as a financial advisor for Voxel. When financial advisors sit at the M&A table, it often means that the seller discussed potential M&A deals with multiple suitors, Talkin’ Cloud believes.

Can Voxel Boost Internap?

Internap, meanwhile, hasn’t exactly been a growth company. For its third quarter of 2011, Internap’s revenue was $62 million, compared to $60.3 million for Q3 of 2010. The company’s data center services revenues rose 8 percent in Q3 2011 vs. Q3 2010. Also, Internap had a Q3 2011 net loss of $1.8 million, compared with a $1.7 million net loss in Q3 2010.

Still, partners that have worked with both Internap and Voxel sound upbeat about the deal.

“Opengear has worked with both Voxel and Internap and we think this merger makes a lot of sense and will greatly benefit the channel,” said Todd Rychecky, VP of sales and marketing in North America at OpenGear, which develops console server, remote management and monitoring solutions. “Internap channel partners will benefit from adding Voxel’s expertise in complex managed hosting and cloud services. Together, these companies can solve a multitude of challenges around cloud computing and managed hosting.”

The big Internap-Voxel deal arrives as numerous midsize and small MSPs buy up one another during the opening days of 2012.

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