Hostway, a Chicago-based managed cloud hosting company counting approximately 400 employees and 500,000 customers worldwide, will merge its operations with managed cloud services company HOSTING.com – a Denver-based company with about 200 employees servicing around 4,000 customers. The new company intends to fully merge all functions and operate under a single brand within the next twelve months. Emil Sayegh, the CEO of Hostway will be leading the merged company.
Both cloud hosting companies are private equity owned. Investors Littlejohn & Co., LLC and Pamlico will stay on to equally back the combined new entity. The combined organization has 14 data centers in five countries across three continents. Hostway and HOSTING.com will continue to operate under two separate brands and operational models for a limited period during the interim integration. Financial terms of the merger were not disclosed. It is also not clear what under which brand the new entity will continue its operations.
“Both Hostway and HOSTING have always had an uncompromising commitment to customer service and an incredible history of pioneering leading-edge solutions into the market,” said Emil Sayegh, the CEO and President of the combined new cloud hosting provider. “This merger is a natural progression of the two companies’ focus on providing solutions for CIOs and IT leaders to reduce costs, mitigate risks and increase business agility. Our combined strengths benefit all our customers by delivering even more product sets and the scalability to adapt to clients’ changing needs. We will be in a unique position to help customers every step of the way as they make the journey to hybrid cloud environments while protecting them against ever-emerging threats.”
Private Equity Investments
Littlejohn & Co. is a Greenwich, Connecticut-based investment firm focused on private equity and debt investments primarily in middle market companies. The company owns the Hostway organization and seeks to build sustainable success for its portfolio companies through a disciplined approach to engineering change.
“Both Pamlico and Littlejohn came together to back this merger because we believe the combination makes for an undisputed leader in IT transformation solutions for mission critical applications, and provides opportunity to dominate the market,” said Michael Kaplan, Managing Director, Littlejohn & Co.
Pamlico Capital is a private equity firm founded in 1988 that primarily invests in growing middle-market companies in North America. The company owns the HOSTING.com organization. Pamlico Capital seeks control-oriented growth equity investments of up to $125 million alongside founders and proven management teams in its target industries; business & technology services, communications, and healthcare. Since inception, the firm, based in Charlotte, NC, has invested over $3 billion.
“Collectively the organization is even better positioned to address the top enterprise IT challenges of security, costs, lack of IT resources, governance and multi-cloud complexity,” said Scott Stevens, Partner at Pamlico Capital. “Both Pamlico and Littlejohn are prepared to fully support the company into its next phase of growth.”