InterXion's ZUR1 data center in Zurich-Glattbrugg, Switzerland
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(WEB HOST INDUSTRY REVIEW) — There was quite a bit of coverage in the buildup to the initial public offering of European Data Center provider InterXion’s (www.interxion.com) initial public offering. The company’s stock was set to start trading as INXN Friday on the New York Stock Exchange.
The big news from Thursday evening was that the company had expanded the size of its IPO and priced the offering at the top of its projected range of $11 to $13 per share (it settled on $13).
A Reuters story from Thursday went over the changes to the size and pricing:
“InterXion [settled on] 20.4 million shares at $13 each, raising about $264.9 million, an underwriter said. The company had planned to sell shares for $11 to $13 each, according to a regulatory filing. InterXion planned to sell 16.25 million ordinary shares, while 4.13 million shares were expected to be sold by existing shareholders.”
In a post covering the changes to the pricing and size of the IPO, Data Center Knowledge’s Rich Miller pointed out the potential for Friday’s offering to benefit from the Verizon acquisition of Terremark, which occurred late Thursday.
“The Interxion IPO may benefit from fortuitous timing. Industry cohort Terremark (TMRK) announced late Thursday that it has agreed to be acquired by Verizon for $1.4 million, with the deal priced at a 35 percent premium to the closing price for Terremark.”
In a post from earlier in the week, The Street predicted a solid performance for the InterXion stock following the IPO, based on the demand for data center services in Europe.
“Even though Europe is slightly behind the outsourcing trend already embraced by other regions of the world, the growth in Internet traffic, cloud computing and consumer applications has made it difficult for companies to sustain in-house data operations. IDC is projecting a 5-year compounded annual growth rate of 19% by 2014 as market demand for colocation data centers increases in INXN’s core areas such as the U.K., France, Germany and The Netherlands.”
Seeking Alpha posted quite an exhaustive two-part examination of the company earlier in the week, written by Paolo Gorgo.
The first part examines the offering itself, and the competitive landscape for colocation in Europe, for the benefit of potential investors in North America.
“Interxion’s operations are all based in Europe and have been, so far, reported in the euro currency. Interxion’s proposed IPO on the NYSE will represent a unique opportunity for U.S. investors to access a leader in the fast growing European multi-tenant network neutral data center market, but may also raise questions about the company’s strategy in the North American market.”
The second part delves in greater detail into the company’s financials.
“It is interesting to note that about fifty-three percent of Interxion’s Monthly Recurring Revenue for the nine months ended September 30, 2010 was generated by contracts with terms of one year or less remaining. However, the company has, so far, experienced a very low churn of less than 2% per quarter, similar to its peers (Average Monthly Churn rate was 0.6% in the nine months ended September 30, 2010).”
INXN opened trading Friday up at $14.55.
We’ll post some more coverage of the IPO today.
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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