Datacenter, hosting, and cloud services provider Savvis (news, filings) [a subsidiary of CenturyLink (NYSE:CTL, news, filings)] has agreed to acquire Fusepoint, a Canadian based company with a rather similar portfolio of colocation and IT services. The price tag is $124.5M in cash, which will buy annualized revenue of about $47.4M and EBITDA of $12M. That's a 10x EBITDA multiple, but there are likely to be a fair amount of synergies to be had as the new assets will benefit from Savvis's overall scale.
Fusepoint operates three datacenters, one each in Toronto, Montreal, and Vancouver, totaling some 40,000 square feet of sellable space. If you're going to enter the Canadian marketplace, those three locations are of course the right places to start. The square footage isn't huge, but the datacenter market up north is at an earlier stage in development than in the US. So why is Savvis going to Canada? Savvis's CEO and Chairman Jim Ousely succinctly puts it:
"The acquisition of Fusepoint is a step toward one of our most important goals to expand our geographic presence around the world. Our largest customers have been asking us to expand into Canada, and the acquisition of Fusepoint allows us to do so in a seamless and efficient manner."
Savvis will use its currently available cash plus an upsize in its existing revolver led by Wells Fargo to pay for the acquisition.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: Datacenter · Mergers and Acquisitions