(WEB HOST INDUSTRY REVIEW) — Colocation and network services provider Telx Group (www.telx.com) announced on Friday that it has filed the preliminary paperwork with the US Securities and Exchange Commission for an initial public offering intended to raise up to $100 million.
The IPO is underwritten by Goldman Sachs and Deutsche Bank, along with Oppenheimer & Co, RBC Capital Markets, SunTrust Robinson Humphrey and Piper Jaffray. Telx’s plan is to list the company on the Nasdaq with the stock symbol TELX.
According to Telx, the company has 763 customers, and provides more than 28,272 physical interconnections, as of the end of 2009. It operates 15 data centers in nine US markets, totaling more than 480,000 square feet of data center space. And it owns the 56 Marietta carrier hotel in Atlanta.
Among Telx’s customers are several hosting companies, data center operators and connectivity firms, including Switch & Data, SoftLayer, Level 3 Communications, AT&T, Sprint, Qwest and Cogent.
The company also says it has an exclusive relationship to provide interconnection within 10 of the wholesale datacenter buildings operated by Digital Realty Trust, provding access into further markets.
In the filing, Telx says it plans to use the proceeds of the offering to further penetrate the geographic markets in which it already excels, to expand its relationships with existing customers, to acquire profitable new customers, increase network density and potentially expand through selective acquisition.
According to the report on Datacenter Knowledge, Telx has expanded its data center footprint since it was acquired in 2006 by GI Partners. An investment bank with several assets in the Internet infrastructure arena, GI Partners also owns hosting provider The Planet.
In its S-1 form, Telx reports a net loss of $9.9 million in 2009, on $98.3 million in revenue. But the company’s revenue has increased from $50.8 million in 2007, and $70 million in 2008; and its losses have decreased from $37.2 million in 2007 and 31.3 million in 2008.
The last IPO to be completed in the data center business was Rackspace’s offering in 2009. A major difference in that case was the fact that the company had been profitable for five years. But according to many involved in the finance side of the hosting business, there is a strong appetite for investment in the data center business right now.
No information has yet been provided about potential share prices for the IPO, or the number of shares that would be on offer – that information would be forthcoming, further along in the process.
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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