Internap announced on Wednesday its plans to acquire iWeb, a Montreal-based web hosting and colocation services provider, for $145 million. Internap said that iWeb’s dedicated and cloud hosting offerings will complement its existing portfolio of bare-metal and virtual cloud, managed hosting and colocation services, while adding scale.
iWeb has four data centers in Montreal, and serves more than 10,000 SMB customers in more than 100 countries, with approximately 200 employees. In its fiscal year ending September 30, 2013, iWeb delivered approximately $44 million revenue and $11 million EBITDA.
“Internap’s acquisition of iWeb has a number of angles that could drive some interesting synergies for Internap. There are some common technologies running with both firms and the billing system – typically something that is difficult or never properly integrated in mergers - runs Ubersmith (which Internap owns) on both sides,” Philbert Shih, managing director of Structure Research. “Internap also acquires scale, hosting revenues, more data center footprint, entry into a new geography and language skills that cross over several countries and regions. Perhaps the area with the most potential to deliver value is the upside of a wider-ranging portfolio and migration path.”
Internap and iWeb also are both active participants in the OpenStack Foundation. The combined team will double the size of Internap’s IaaS R&D resources, according to the announcement.
iWeb also brings to Internap a number of server options, including its proprietary Smart Servers solution that combines virtualization with dedicated hosting.
“iWeb fits perfectly into our strategy to deliver a comprehensive portfolio that can serve the needs of our customers at every stage of their business lifecycle, from an initial startup wanting a single dedicated server to a scale-out Internet app provider or global enterprise requiring a hybrid solution across multiple data centers around the world,” Eric Cooney, president and chief executive officer of Internap said.“This combination represents a milestone in the transformation of Internap’s business to a leading IT infrastructure services provider that can deliver on customers’ complete range of IaaS demands.”
The acquisition of iWeb will build on Internap’s Voxel acquisition, which closed at the end of 2011 for $30 million. In 2012, Internap launched its Agile Hosting services and a new online configurator, based on its acquisition of Voxel.
In the third quarter Internap reported revenue of $69.6 million, up 2 percent over Q3 2012, with data center services revenue of $45.5 million, up 8 percent versus Q3 2012.