Infrastructure-as-a-Service (IaaS) provider Internap (NASDAQ: INAP) plans to acquire hosting provider iWeb in a deal valued at approximately $145 million. Headquartered in Montreal, Canada, iWeb serves 10,000 SMB customers in more than 100 countries and has approximately 200 employees.
The combination of Internap and iWeb creates a top five IT infrastructure hosting provider, with trailing twelve months revenue in excess of $320 million. In its fiscal year ending September 30, 2013, iWeb delivered approximately $44 million of revenue and $11 million of EBITDA.
New $350 million credit facility
Internap expects the acquisition to close in December of 2013, following customary closing conditions. Internap received a commitment from Jefferies Finance LLC and PNC Bank, National Association to provide a new $350 million credit facility that will be used, in part, to fund the acquisition and pay off existing debts.
iWeb’s dedicated server and cloud hosting offerings and the added scale it delivers would complement Internap’s existing portfolio of bare-metal and virtual cloud, managed hosting and colocation services while significantly expanding Internap’s addressable market. iWeb now opens up the global SMB segment for Internap’s complete Infrastructure-as-a-Service (IaaS) portfolio.
Active participants OpenStack
iWeb’s SMB customers will gain access to Internap’s broad geographic footprint of data centers, hybrid IT infrastructure capabilities, automated provisioning and high-performance network to support their business growth. Similarly, Internap’s webscale customers will gain the advantage of an even broader server offering with additional price points and configurations.
Both Internap and iWeb are active participants in the OpenStack Foundation, and iWeb was recently ranked among the top 25 code contributors to the project. Effectively doubling the size of Internap’s IaaS R&D resources, the combined team will focus on continuing to build performance and hybridization differentiation into the rapidly growing OpenStack community. The combination would also result in enhanced development velocity, allowing Internap to bring new IaaS features and functionality to market faster.