(WEB HOST INDUSTRY REVIEW) — IT infrastructure solutions provider Cervalis (www.cervalis.com) has closed a preferred equity investment agreement with Goldman Sachs (www2.goldmansachs.com), enabling the company to accelerate its data center expansion.
Cervalis, which offers managed hosting, co-location, and business continuity and disaster recovery, recently opened a new, 150,000-square-foot data center in Northern New Jersey. According to Cervalis’ Thursday announcement, the additional capital will be used to expand Cervalis’ footprint in existing and new markets.
“We are very pleased to have completed this important transaction,” Cervalis chief executive officer Michael Boccardi said in a statement. “The partnership with Goldman Sachs provides us with growth capital to accelerate our strategic expansion plans. Additionally, as a company, going forward we will have the benefit of Goldman’s broad industry experience in this sector to help guide us in fulfilling our long-term objectives for all our shareholders.”
Cervalis chairman Lawrence F. DeGeorge added, “We realized during our investment process Goldman Sachs’ extensive experience in this sector made them an exceptional fit with Cervalis. As Chairman and the company’s majority shareholder, I am delighted we have them as a partner. The entire Cervalis team is pleased to work with them to grow our business.”
Investment banking firm DH Capital (www.dhcapital.com) acted as exclusive financial advisor to Cervalis on the transaction. Specializing in the Internet infrastructure and communications sectors, DH Capital recently advised Web host SoftLayer in a deal that gave it $10 million in new financing, as well as Cervalis on a number of occasions.
“DH Capital has advised us through several significant financing transactions over the last few years,” Boccardi said. “Once again, we are extremely pleased with the results the DH Capital team achieved in securing this investment. Partnering with Goldman Sachs provides us with capital to fulfill our vision and execute our strategic growth plans.”
Last year, DH Capital had helped Cervalis close $48 million in senior credit facilities provided by a group of commercial lending institutions for the construction of its Northern New Jersey data center, and for refinancing existing debt. Also, in 2007, DH Capital advised Cervalis on a deal involving $20 million in senior credit facilities.
“It has been a real pleasure to assist Cervalis as it has reached another important milestone,” DH Capital managing director Mark Thorsheim stated. “The company has developed a high-end data center platform poised for growth. We are excited to match Cervalis with one of the most experienced private equity investors in the IT Infrastructure sector.”
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