An image from Yahoo Finance, charting NaviSite's stock performance over 6 months
(WEB HOST INDUSTRY REVIEW) — Cable television operator Time Warner Cable said on Tuesday that it plans to acquire publicly traded managed web hosting provider NaviSite (www.navisite.com) for $230 million.
Time Warner said it would pay $5.50 per share for the company, a premium of 33 percent over the company’s February 1 closing price of $4.13 on the NASDAQ.
The acquisition would be the cable giant’s first foray into the data center services business, with NaviSite itself representing a broad selection of hosting services, including high-end managed hosting and a variety of cloud services, including cloud storage.
“Our commercial services business is a key growth driver for the company and one in which we continue to see great opportunity,” said Glenn Britt, chairman and CEO of Time Warner Cable, quoted in the company’s press release. “NaviSite provides us with a successful managed services business and a new, innovative managed cloud platform representing significant new growth opportunities. We expect to build upon NaviSite’s successful enterprise-class offerings, and their operational capabilities, infrastructure and expertise to more rapidly create a robust managed services offering for small and medium sized businesses. This transaction is consistent with our capital allocation strategy – selectively investing in our business to accelerate growth while continuing to return capital to shareholders.
NaviSite’s acquisition news comes after a year of renewed acquisition interest in high-end hosting providers, and just a week after the acquisition of publicly traded data center business Terremark by telecommunications carrier Verizon Communications, for $1.4 billion.
According to reports, the acquisition news comes just as NaviSite plans to celebrate the opening of its newest data center in San Jose, California, on February 2, a node for its NaviCloud cloud service.
Time Warner Cable says it expects the transaction to close in the second quarter of 2011.
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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