(WEB HOST INDUSTRY REVIEW) — Web hosting provider Navisite (www.navisite.com) revealed on Tuesday that it is selling its colocation business, despite meeting compliance with the NASDAQ Stock Market guidelines on minimum market valuations.
The company was looking for potential buyers for its colocation division in an effort to meet NASDAQ compliance challenges.
When Navisite’s stock price increased, helping the company meet the exchange’s minimum market cap of $35 million for 10 consecutive sessions, the company decided it would still sell of its colocation business.
NaviSite will now shift its focus on developing its enterprise application hosting and cloud platform, while using the revenues from the colocation sale to reduce its debts.
“The company continues to pursue its strategic plan in order to improve the company’s balance sheet by reducing its debt obligations and focus on its core businesses for growth and performance,” said the company in a statement Tuesday.
Earlier this month, NaviSite hired the Bank Street group to generate interest in potential buyers for its colocation business.
The company also decided not to renew the lease on its Los Angeles data center, located at the Garland Building on 1200 W. Seventh, which houses the company’s colocation clients.
Becker says the company tried many times to renew the lease in the last two years but failed to negotiate a feasible rent.
As a result, Navisite and the building’s landlord reached an agreement where it would transfer its clients back to the landlord and occupy the space until the lease expired.
The agreement led to $1 million in loss revenues for Navisite for the quarter ending April 30.
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