NaviSite Sells Dallas Colocation Business

December 21, 2010

2 Min Read
NaviSite Sells Dallas Colocation Business

By samdizzy

NaviSite, a member of our Talkin’ Cloud Stock Index, has sold its Dallas, Texas, colocation business to Cologix Dallas Inc. for $12.75 million in cash. The move is part of a larger trend in the datacenter industry, where colocation businesses are trading hands faster than poker chips on a Vegas black jack table.

According to a prepared statement, all NaviSite Dallas colocation customers will be transferred to Cologix. Also, Cologix will assume NaviSite’s lease of the Dallas data center where the services are hosted, managed, and supported. The transaction is effective immediately. Net proceeds from the sale will be used to repay debt. NaviSite will remain a customer and bandwidth service provider in the Cologix facility in Dallas.

NaviSite says the sale will strengthen the company’s balance sheet and sharpen NaviSite’s focus on managed cloud services. Translation: NaviSite is reducing its exposure to traditional, basic colocation services.

Meanwhile, the Texas region seems to be packed with hosting providers and cloud providers. Rackspace is based in San Antonio and SoftLayer, which recently merged with The Planet, is based in Dallas.

Let’s Make a Deal

Elsewhere, consolidation in the colocation market is a nationwide trend. A few prime examples:

  • Last week, Telephone and Data Systems Inc. acquired Team Technologies, a data center and colocation provider, for $47 million. TDS also acquired VISI Inc. in March 2010.

  • In early December, private equity firm Accelon Capital acquired UnitedLayer, a colocation data center and managed hosting provider in San Francisco.

  • Also in early December, colocation and managed hosting provider ViaWest acquired SingleEdge, a colocation and managed hosting provider in Salt Lake City, Utah.

  • In November, fiber-optic specialist Sidera Networks acquired colocation provider Cross Connect Solutions.

  • In January, Cavalier acquired NET Telcos, a Richmond, Va.-based provider of colocation and managed services. NET Telcos offers server virtualization, data backups, firewalls and e-mail hosting.

For VARs and MSPs, colocation market consolidation means channel partners need to work more aggressively than ever to find hosting partners that have stable, predictable partner programs.

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