Courtesy of Hostway the last shoe has probably dropped. Now I should be able to complete my countdown to the major hosting sector M&A transactions for 2013. This very subjective list was whittled from 90 to 10, so feel free to add your comments. Not counting any December 31st headlines let’s dance through those major hosting sector mergers and acquisitions. My list of important events.
10. In a further commitment to the industry, Canada’s NOVACAP (also invested in iWeb) assisted co-founder and CEO Jeffrey Davis to acquire all the equity in Florida based Host.net from BroadbandONE. It’s always good to see smart money doubling down. And as you will see later NOVACAP also made a smart exit.
9. Ireland’s Digiweb was acquired by Viatel. This 2x revenues €120 million ($165 million) transaction underscores telecom centric firms building a broad base of services. About 18 months ago you will note that I started to use the term IT in my blogs. Here is another reason why.
8. Announced in January and closed in July Intermedia’s $55 million acquisition of Telanetix. Expanding on VoIP you can add the word unified communications as interests in the hosting space. It may have been a bargain.
7. Rogers Communications, three transactions. In April it picked up BlackIron Data (a Primus company) for $200 million followed by September’s Pivot Data Centers and Granite Networks acquisitions for $155 million $6.25 million, respectively. The Pivot and Granite transaction equaled a whopping 5x revenues. Maybe they should move up the list.
6. Black Lotus’ acquisition of 8×8’s managed hosting assets. Important to me because I represented 8×8. But more importantly Black Lotus represents smaller firms that are now backed by large private investment firms.
5. Who can say no to the $667 million acquisition of Host Europe Group Ltd. by Cinven Group? The seller, Montagu Private Equity, purchased Host Group for $360 million in 2010. Love those returns.
4. GoDaddy’s purchase of Media Temple. Let’s face it: Media Temple’s customer base is not your typical GoDaddy shared customer. With a stable like Volkswagen, Sony, and Red Bull plus a tight relationship with LA’s creative class of digital designers and developers this is a transaction that can assist GoDaddy in upping it’s game. Great talent.
3. Hostway’s acquisition by private equity firm Littlejohn & Company. This December transaction signals continued interest and commitment the private sector that continues to see hosting as a great place to invest.
2. SoftLayers purchase by IBM. This $2.3 billion dollar transaction obviously near the top of the list. Note: I was the only one that even came close to the predicted valuation.
1. Internap’s acquisition of Canada’s iWeb. Besides setting a great price point of 13x EBITDA, the $279 million transaction signaled a potential major market shift. The news that the NSA was spying on your data prompted predictions that it could cost up to $180 billion in lost revenues for the US Internet industry. Internap was all over the world except Canada until the iWeb transaction. Canada is as close to the US as you can get without going over the line.
And why is Endurance not listed? I did not include IPOs.
In summary I counted almost two times the number of significant transactions in the second part of the year. We are on a roll.
For more information on my magic 90, each is posted on the NCC International Facebook page with links back to the respective articles.
Merry Christmas to all!