Less than one week after Verizon made a bold acquisition move with Terremark, Time Warner Cable is making a cloud focused acquisition of their own by acquiring NaviSite. The deal is valued at $230 million.
NaviSite provides enterprise-class hosting, managed applications, messaging and cloud services. “Our commercial services business is a key growth driver for the company and one in which we continue to see great opportunity,” said Glenn Britt, Chairman and CEO of Time Warner Cable. “NaviSite provides us with a successful managed services business and a new, innovative managed cloud platform representing significant new growth opportunities. We expect to build upon NaviSite’s successful enterprise-class offerings, and their operational capabilities, infrastructure and expertise to more rapidly create a robust managed services offering for small and medium sized businesses.”
The move illustrates both a growing appetite for a managed services product portfolio by all types of service providers and a rapidly forming competitive battlefront among the cable and telecom industries for the lucrative enterprise services market. Both industries are beefing up their capabilities to provide a range of managed and cloud computing services which target businesses of all sizes.
NaviSite serves approximately 1,200 customers through ten data centers in the U.S. and U.K. With 570 employees. Navisite operates network operations centers in Andover, Mass. and Gurgaon, India. The company had $126 million in revenue in 2010 but had a net loss which Time Warner Cable expects will yield them a net present value of approximately $40 million in tax savings after closing.
We expect the cloud managed services M&A binge to continue, as telcos and cablecos of all sizes look to grow their SMB and enterprise holdings to effectively compete in this fast evolving marketplace.