A screenshot of Knology's website
(WEB HOST INDUSTRY REVIEW) — Telecommunications provider Knology announced that it has acquired data center operator E Solutions for $13.8 million in cash.
Headquartered in West Point, Georgia, E Solutions provides colocation and data center services to customers in the Southeast, upper Midwest and Kansas regions. The company operates two SAS 70 Type II certified data centers in Tampa, Florida.
Knology’s fiber-based business products will complement Knology’s existing managed services. Knology’s services include iPlex, which delivers Ethernet connections to an IP-PBX using Session Initiated Protocol technology, Passive Optical Network, which supplies IP architecture with segmented voice and data bandwidth, and Managed Integrated Network Solutions, an integrated IP-based technology which converges data and voice.
“The addition of E Solutions will enhance Knology’s already strong commercial product offering and allow us to better serve our business customers,” said Todd Holt, president of Knology. “This transaction demonstrates our ongoing disciplined approach toward merger and acquisition opportunities given the economic aspects, as well as the quality of the people and assets involved. Knology will be able to leverage its existing customer base, salesforce and certain real estate to complement a datacenter business that already has a healthy growth profile. We welcome the E Solutions team to Knology and are excited about our future together.”
Knology provides both residential and business customers with telecommunication services including digital cable TV, local and long distance digital telephone service, and high-speed Internet access.
The transaction is immediately accretive to Knology on a levered free cash flow per share basis, according to the press release. Knology will be able to fully amortize the purchase price, resulting in tax benefits with an estimated net present value of $2.8 million.
Stephens Inc. served as financial advisor to Knology and RBC Capital Markets acted as financial advisor to E Solutions in this transaction.
About Justin Lee
Justin Lee has been a staff analyst with theWHIR since 2004. He writes about a range of web hosting and IT-related issues facing the industry on the WHIR website, as well the print version of the WHIR magazine. Follow him on Twitter @Justin_theWHIR.
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