October 5, 2004 — (WEB HOST INDUSTRY REVIEW) — Canadian Internet bandwidth and colocation provider Peer 1 Network (peer1.net) announced on Tuesday that it has entered into a definitive agreement to acquire all of the assets of Web hosting provider ServerBeach (serverbeach.com) for $7 million US in cash. The acquired assets include over 4,200 dedicated hosting customers and a data center facility based in San Antonio, Texas.
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Peer 1 said it expects the acquisition to increase monthly recurring revenue by 57 percent to over $2 million Canadian. The company said the integration of ServerBeach, which will operate as a wholly owned subsidiary of Peer 1, will be completed quickly, without major cost.
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“The highly accretive acquisition of ServerBeach is a realization of Peer 1 management’s strategy of accelerated growth through acquisitions,” said Geoffrey Hampson, president and CEO of Peer 1 Network. “Peer 1 has been seeking acquisitions that increase the footprint of the Peer 1 network, that increase the colocation capacity, and that offer a wider range of choices to Peer 1 customers. Because we are leveraging our existing colocation and network infrastructure, there will be very little incremental cost associated with the future growth of this new business.”
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ServerBeach was launched in early 2002 by Richard Yoo, a founder of Rackspace Managed Hosting. The company specialized in discount dedicated servers on both Linux and Windows platforms.
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“The fit between the ServerBeach and Peer 1 product families is outstanding,” said Yoo. “With Peer 1′s and ServerBeach’s corporate cultures being so closely aligned, the combination will be a win for the ServerBeach team and their customers. Peer 1 is acquiring a great company that will contribute to producing a strong market force in the dedicated server, colocation and bandwidth markets.”
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Final terms are subject to regulatory approval, and final closing is expected to take place within 15 days. Peer 1 is maintaining ServerBeach’s operations in San Antonio, Texas.
