(WEB HOST INDUSTRY REVIEW) — Colocation provider Telx (www.telx.com) announced on Wednesday that it has secured $43.5 million in new financing from CIT Communications, Media & Entertainment and RBC Capital Markets, replacing its former term loan and providing funding for new projects and business enhancements.
Terms of the transaction were not disclosed.
CIT Communications, Media & Entertainment secured financing from RBC Capital Markets based on Telx’s “strong, sustained growth; the strength of Telx’s business model and customer base; and the data center market as a whole,” according the press release.
The company’s business plan was fully funded under its former financing structure. This latest deal provides greater opportunities to enhance the company’s capabilities and adopt new technologies that will expand the services that Telx is able to offer its customers.
CIT has been a financing partner of Telx’s since 2007, while RBC Capital Markets is a new lending partner.
Telx says it plans to use the additional funding to “pursue continued expansion in existing cities to meet ongoing customer demand,” as well as explore new opportunities by entering “new markets as needed.”
The company has shown significant growth in the past year, achieving 39 percent revenue growth in Q1 2009, compared to the same period last year.
“Despite a challenging economy, Telx continues to experience solid revenue growth across multiple market verticals,” says Chris Downie, president and chief financial officer for Telx. “The company’s business model has proven itself not only viable, but strong, and we expect to continue to deliver the same positive results in the coming years based on industry demand for colocation and interconnection services in our facilities. We’re pleased to have CIT and RBC, who each has an in-depth knowledge of our industry, as our financial partners and appreciate their support for our continued business endeavors.”
Since the recession began, more IT companies are announcing new rounds of financing. In April, AtlantaNAP raised $7.5 million in debt financing from RBC Bank, which replaced a more expensive line of credit and expand operations.
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