German MSP q.beyond Considers Selling Its Colocation Business

q.beyond AG, a large company from Germany formerly known as QSC employing more than 900 people who accompany SME customers throughout their digital journey, is currently reviewing the potential sale of its data center colocation business.

The managed IT service provider’s housing and hosting business is operated by IP Exchange GmbH, a wholly owned subsidiary of q.beyond. IP Exchange is operating three colocation data centers in Munich and Nuremberg and has 51 employees. In 2020, it generated revenues of around € 20 million.

The goal of this spin-off is to broaden the strategic options available to this capital-intensive business, especially in terms of preparing it for partnerships or sale.

q.beyond’s Management Board has agreed to start a structured process to examine the possibility for a future sale of this data center colocation business. Approval to sell the majority or all of q.beyond’s wholly-owned subsidiary would necessitate extremely favorable terms.

“The colocation business has contributed solid revenues and earnings for years and there is no pressure to act now,” said Jürgen Hermann, CEO of q.beyond. “Having said that, colocation offers few synergies with our Cloud, SAP and IoT business and the extra liquidity would further increase our leeway for acquisitions.”

Not only that, the opportunities available to IP Exchange could be better leveraged with a suitable new owner or a new partner at q.beyond’s side, according to the company.

Acquisitions

Photo Jürgen Hermann, CEO of q.beyond
“The colocation business has contributed solid revenues and earnings for years and there is no pressure to act now,” said Jürgen Hermann, CEO of q.beyond.

In 2019, q.beyond sold its traditional telecoms company, while in 2020, it completely acquired software engineering firm Incloud. Additional technology acquisitions are anticipated for 2021 and the years thereafter.

q.beyond has focused on three important areas: First, it hopes to deepen or widen its sector concentration through acquisitions. Second, the purchases should help the company expand its product offering in specific areas, such as corporate software. Third, acquisitions should complement existing technological capabilities to strengthen the company’s position in forward-looking industries such as cloud services, data analytics, embedded software, IoT, and AI.

q.beyond is already well positioned for possible acquisitions, with an equity ratio of 74%, net liquidity of roughly € 40 million, and no debt. The sale of most or all of IP Exchange GmbH would greatly boost the company’s financial flexibility and open up new possibilities. “We will accelerate our growth in the years ahead,” stated Jürgen Hermann as their core objective.

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