According to reports, cloud infrastructure provider Hosting.com could be looking for a buyer.
Hosting.com, which is privately held by private equity firm Pamlico Capital Management, has an EBIDA of $30 million according to a source. At a valuation of 10-times annual revenue, which a source said is common for Internet infrastructure providers, the company could be sold in the range of $300M.
IT Infrastructure providers are an appealing investment. A source told The Deal that a potential buyer could be a telcos seeing their legacy landline services shrink, or another private equity firm looking to strategically enter the IT infrastructure market.
One of the oldest hosting companies, Hosting.com was founded in 1992 in Denver, and now owns and operates six data centers across North America. Since 2008, Hosting.com has been owned by Pamlico Capital (then known as Wachovia Capital Partners). This private equity firm also acquired HostMySite the same year, merging it into the Hosting.com brand.
Hosting.com acquired managed hosting provider NeoSpire in 2011, with DH Capital serving as NeoSpire’s exclusive financial advisor. Hosting.com also bought database specialist Ntirety in 2014.
Liam Eagle, a senior research analyst at consultancy 451 Research, said that Hosting.com finds itself positioned as a mid-tier provider in the managed hosting space. Managed hosts are typically either large or small, and mid-size providers like Hosting.com are ripe for acquisition.
A Hosting.com sale would be among other transactions involving cloud insfrastructure providers. For instance, QTS Realty Trust bought Carpathia Hosting from Spire Capital Partners in June for around $326 million, and CyrusOne paid $400 million for Cervalis Holdings.