Internap, an IT and managed service provider, is enhancing its SMB Infrastructure as a Service (IaaS) capabilities by acquiring cloud provider iWeb for about $145 million.
The company said that iWeb's offerings will complement its existing bare-metal and virtual cloud, managed hosting and colocation services while expanding its addressable market. By making this deal, Internap will immediately gain 10,000 new SMB customers based in over 100 countries.
iWeb is also a profitable company, reporting $44 million of revenue and $11 million of EBITDA in its fiscal year ending Sept. 30.
Timing for this deal could not be better for Internap. According to McKinsey & Company, the worldwide SMB market for IaaS services will reach $26 billion by 2015.
Internap said its purchase of iWeb builds on its acquisition of cloud provider Voxel in December 2011. By integrating Voxel's product offering, Internap was able to make its AgileCLOUD virtual cloud and AgileSERVER bare-metal cloud services across five data centers worldwide. With iWeb now in the mix, it can extend its IaaS portfolio to the underserved global SMB segment.
Jefferies LLC served as the exclusive financial advisor to Internap.
For this acquisition, Internap secured a $350 million credit facility from Jefferies Finance LLC and PNC Bank, National Association, part of which will be used to fund the acquisition and pay off existing debts.
After meeting necessary conditions, Internap expects the acquisition to close in December.
- see the release
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Updated article on Oct. 31 with a mention of Jefferies LLC as a financial advisor and lender for this deal.