Anybody who attended HostingCon last week probably had – or heard – at least a couple of conversations about the big rumor that was making the rounds.
I heard the same thing from a half-dozen knowledgeable people (but nothing like an official source): that GI Partners is buying SoftLayer; that the deal is more or less complete; and that it’s worth more than $300 million.
While any or all of that may be true, nothing has been officially stated. And, given that it lacks any official confirmation, this post certainly shouldn’t be taken as a “news story,” per se. It’s just an acknowledgement that folks are talking, as evidenced by a lengthy (14 pages, as of Monday) discussion on WebHosting Talk.
A WebHosting Talk thread isn’t news either. But it includes some interesting input, including comments from UK2Group CEO Ditlev Bredahl, whose 100TB.com brand is a major customer at SoftLayer, and who expresses a lot of confidence that whatever is in the works will not be disruptive to that business.
A few things are patently true:
- GI Partners has a ton of capital under management, and a definite interest in the hosting business. It owns The Planet, and a controlling interest in Telx (though that company is set to go public sometime this year).
- SoftLayer has quickly become one of the largest competitors of The Planet, and has a reputation for being one of the better-run companies in the hosting business. Many of the key members of the SoftLayer executive team left The Planet before that company was acquired by GI partners.
- Softlayer announced on Friday that it earned $60 million from January 1 through June 30 of this year, and is on track to earn $125 million in 2010. The same release says the company is now hosting 30,000 servers.
- GI Partners merged EV1 Servers and The Planet after acquiring those two companies in 2006.
Assuming, for the sake of discussion, that the rough details of the rumor are true, there are a few obvious questions raised by the prospect.
- Would the objective of the acquisition be to merge the two companies, or continue to operate them separately?
- Were they to merge, how would that affect the range offerings available from either company? Who would run the merged organization? What would it be called?
- Would GI have a long-term plan for the organization as a property, or would there be any immediate focus on taking the combined property public?
Should an official announcement arrive, rest assured that we’ll have plenty of coverage.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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