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Entries in Deals - Data Center (35)

Tuesday
Apr102012
DateTuesday, April 10, 2012 at 1:15PM

Xand and Access Northeast Merge, Eye Growth in the Cloud

Company Projects 70 Percent Growth in Cloud Services in 2012

Over the past year, Boston-based private equity of firm ABRY Partners has accumulated a sizable data center portfolio across the U.S. through a string of deals. Last week, ABRY increased its stake data centers with yet another transaction.  On Tuesday April 3, ABRY announced that one of its portfolio companies, data center operator Xand Corporation, had merged with Marlboro, MA-based Access Northeast.  Financial terms of the deal were not disclosed.

The merger of Xand and Access Northeast creates one of the largest privately-owned data center companies in the Northeast U.S. with facilities in Massachusetts, New York and Connecticut. The combined company now serves approximately 1,000 customers with a mix of facilities-based colocation services and managed cloud services.

While Access Northeast will be a newcomer to the ARBY umbrella of companies, Xand itself has only been an ARBY company since late 2011.  The Hawthorne, NY-based data center provider was acquired by ABRY in a deal announced October 13, 2011.  Xand operates approximately 30k square feet of data center space located in its flagship data center in Westchester County, NY.

Access Northeast meanwhile operates data centers in three New England cities—Worcester and Marlboro, MA, and Danbury, CT.  In June 2011, Access completed a new 10k square foot raised floor project in Marlboro, increasing its data center space to 25k in the region.  The rest of Access’ 50k square feet of data center space is split between Worcester and Danbury.

There is no publicly-available financial information on both Xand and Access Northeast, but Rob Stephenson, chief marketing officer of the merged company (and former ceo of Access Northeast), recently estimated Xand’s annual revenue at $13m-$15m and Access Northeast’s in the range of $19m-$20m.  While both companies have exhibited strong growth in recent years according to Stephenson, he sees the top line for both entities pushing higher in the coming years as well, fueled by the demand for cloud services.

"We've seen a combined growth of 20 percent over the last three to four years," commented Stephenson. "What's getting our growth this year to up to 25 percent is the growth in cloud services. We anticipate at least a 70 percent growth in cloud services, maybe even a doubling in revenue, from 2011 to 2012."

ABRY will likely invest heavily in Xand/Access Northeast in the next few years, supporting this increasing demand for cloud services.  The combined companies control approximately 60k square feet of developable data center space on top of their facilities currently in operation.

ABRY has a wealth of experience in the data center and managed services space, and has been successful in managing companies through high-growth periods and then dealing them for a premium.  ABRY picked up Hosted Solutions in 2008 for $140m, and then sold the managed services provider to Windstream just two years later for $310m. Similarly, ABRY sold CyrusOne to Cincinnati Bell in 2010 for $525m just two years after acquiring the data center company. ABRY invested heavily in CyrusOne during 2008 and 2009 and was rewarded with attractive deal multiples of 7.2x revenue and 12.5x OIBDA.

AuthorAdam Brissette | Comments Off | Reference1 Reference | | | Print ArticlePrint Article
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Sunday
Apr082012
DateSunday, April 8, 2012 at 3:22PM

Oxford Networks Acquires IT Services Firm

Raises $4.8m to Launch Commercial Data Center

Oxford Networks announced the launch of its commercial data services center on March 26, 2011. The facility is a re-purposed former high-security military communications center located in at the former Brunswick Naval Air Station in Brunswick, Maine. In addition to the launch, Oxford Networks announced it has acquired IT consulting firm Norton Lamb & Company to provide managed IT services at the new facility. Norton Lamb, based in Falmouth, Maine, provides outsourced IT solutions for manufacturing, healthcare, retail/ distribution and government entities throughout Maine, New Hampshire, Vermont and Massachusetts. Terms of the deal were not disclosed.

Lewiston, Maine-based Oxford Networks started as the Oxford County Telephone & Telegraph Company back in 1900. The company operated primarily as an ILEC until 2000, when it began doing business as Oxford Networks. In 2010, Oxford Networks expanded service offerings to include data storage, disaster recovery and managed data services.

We’ve been noting for a while that in order to succeed, ILECs need to branch out and provide new services to remain competitive. Oxford Networks ceo Craig Gunderson recently commented “We can’t rest on our laurels. We’re looking to grow, we’re looking to continue being relevant, continue to evolve.” Oxford Networks attempted to make gains in wireless and IPTV in the past, to no avail. But, the company deployed a fiber network that extends from Bangor into Waterville and Lewiston-Auburn, Maine, and has telecom pipelines that run into Boston, Mass. and Manchester, N.H. As a result of these efforts, Oxford Networks has become considerably less dependent on traditional wireline voice service revenues. In fact for 2011, of the company’s $29.6m of revenue, only approximately $7m came from regulated telecommunications services. $12m came from non-regulated telecommunications services and another $9.7m was from fiber optic networks.

Oxford Networks raised $4.8m from existing investors for the data center launch, and with the launch Oxford Networks will further diversify its revenue streams.  In addition to providing managed services at the new data center, Norton Lamb will continue to serve its existing customers, which means Oxford Networks will see an immediate increase in its customer base. The deal will add approximately 20 people to Oxford Networks’ staff of 120 employees.

AuthorMatt Lydon | Comments Off | | | Print ArticlePrint Article
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Wednesday
Apr042012
DateWednesday, April 4, 2012 at 8:55AM

ABRY's Data Center Xand Merges with Access Northeast

Source: Xand Press Release

Xand and Access Northeast announced that they have merged to form one of the largest privately held data center companies in the Northeast. The newly combined entity operates facilities in three states, New York, Connecticut and Massachusetts, serving nearly 1,000 customers with colocation, cloud and managed services across the region.

The combination of these two providers will be able to offer regional enterprises a multiple data center service across Massachusetts, Connecticut and New York for better implementation of their strategic business continuity and disaster recovery plans.

 

Access Northeast CEO Mr. Stephenson will serve as the Chief Marketing Officer and a member of the Board of Directors in the new entity. He joins Bob DeSantis, CFO, and David Struwas, CEO, to form the core of the new company's management team. Eric Kagan, Access Northeast's current CTO, will also remain with the company in a technical role and as a Board Observer.

Xand was acquired by ABRY Partners in October of 2011. ABRY Partners, a Boston, Mass. private equity investment firm, has made several significant investments in the data center and communications space.

AuthorDeborah Rand | Comments Off | | | Print ArticlePrint Article
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Tuesday
Apr032012
DateTuesday, April 3, 2012 at 9:14AM

Oxford Networks Acquires IT Firm, Launches Data Center

Source: Oxford Networks Press Release

Oxford Networks announced that it is launching its commercial data services center, Oxford Networks Data Center, located at the former high-security Brunswick Naval Air Station.  As part of the data center launch, Oxford Networks has also acquired IT consulting firm Norton Lamb & Company to provide managed IT services at the new facility.  Norton Lamb & Company will take on the Oxford Networks Data Center management in addition to the clients they already serve. 

The Oxford Networks Data Center boasts multiple discrete broadband paths to major backbones and multiple network entry points making it accessible to businesses across the country and worldwide.  The facility will provide server collocation space, managed IT services, disaster recovery services, secure vault data storage, and virtualization services. As a re-purposed former high-security military communications center, the data center provides military grade infrastructure capable of securing an organizations most sensitive information.

Norton Lamb & Company is a twenty year old IT consulting firm located in Falmouth, Maine.  They provide outsourced Information Technology solutions for manufacturing, healthcare, retail/distribution companies and government entities in New England and beyond.

With the addition of the Oxford Networks Data Center and the acquisition of Norton Lamb & Company, Oxford Networks will add twenty new people to its staff of 120 employees.  Matt Jacobson, former gubernatorial candidate and Maine & Company President and CEO, has been named Executive Vice President of Sales for Oxford Networks.

AuthorDeborah Rand | Comments Off | | | Print ArticlePrint Article
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Tuesday
Mar132012
DateTuesday, March 13, 2012 at 4:35PM

Digital Realty Adds Data Center in Growing Dallas Market

REIT Acquires 819k Square Foot Facility for $123m

On February 27, Digital Realty Trust announced that the company paid approximately $123m for an 819k square foot operating data center and office campus in suburban Dallas.  The publicly-traded REIT and data center provider has been an active buyer early in 2012, joining a number of tech- focused REIT’s that have dominated the data center deal scene in recent months.

The Dallas-based property, referred to as Convergence Business Park, features a campus of ten buildings and sits on 168 acres of land, 39 of which are undeveloped and targeted for future expansion.  Of the current operating space, only around 35%, or 287k square feet, is currently leased as data center space to clients.  The rest of the property is leased as office and lab space. 

Consistent with most facilities targeted by Digital Realty, its Dallas property is locked up in long term leases to corporate clients, granting the REIT predictable cash flows on its investment. Eight tenants currently occupy approximately 99% of the space, and are committed to remain there for many years to come.

Digital Realty has put together a large portfolio of data centers in the Dallas area in recent years.  During 2011, its Dallas properties accounted for 9.2% of the company’s total rent revenue, or $72.5m. Silicon Valley, Northern Virginia and San Francisco are the only regions which generate more leasing revenue for the company. Prior to its most recent purchase, Digital Realty owned 14 facilities in Dallas, totaling 1.6m rentable operating square feet and 717k square feet of space targeted for redevelopment.  Including the unused acreage from its new purchase, Digital Realty owns over 1.4m square feet of potential future data center space in the Dallas market.

Michael Foust, Digital Realty ceo, commented on the company’s business interest in Dallas. "Dallas continues to be a very strong market for us. When combined with Datacenter Park Dallas in Richardson, located approximately 25 miles from this site, we believe that we will be able to accommodate a large majority of the data center requirements from customers seeking space in the Dallas market."

In Digital Realty’s sixth annual North American Data Center Demand Survey, for which it released results yesterday, 92% of responding companies indicated they would “definitely” or “probably” expand data center operations in 2012 and 2013—the highest percent of respondents in the survey’s history. Among the most frequently cited locations for new or expanded data center demand: Dallas.

Digital Realty is not the only REIT looking to capitalize on the growing demand for data centers.  Of the 10 most recent data center transactions we have observed, 6 deals involved REIT’s on the buy-side, including Griffin Capital REIT and Carter Validus REIT.  In Carter Validus’ deal, the company acquired a 20k square foot data center facility in Richardson, Texas—just miles away from Digital Realty’s recent purchase.

From a price perspective, Digital Realty paid a relatively low multiple of $150 per square foot for Convergence Business Park, reflective of the high percentage of the operating space that is rented purely as office space.  By comparison, the company paid per square foot multiples in the range of $180 to $570 in its other recent data center transactions.

AuthorAdam Brissette | Comments Off | | | Print ArticlePrint Article
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