Windstream continued its march into the enterprise sector with its latest acquisition, Hosted Solutions, a Raleigh, N.C based regional data center. Hosted Solutions is a 125 employee company that offers managed hosting, managed services, colocation, cloud computing and bandwidth for approximately 600 small and medium-sized business customers as well as large enterprises. It’s an all cash transaction valued at $310 million.
“The acquisition of Hosted Solutions will transform Windstream’s data center business, increasing the scale and scope by adding five state-of-the-art SAS 70 Type II certified data centers in Raleigh, N.C.; Charlotte, N.C., and Boston with a total of 68,000 square feet of data center capacity,” Windstream reports in a press release.
Windstream says Hosted Solutions generated $51.7 million in revenue and $25.7 million in Adjusted OIBDA (operating income before depreciation and amortization) in the 12 months preceding Sept. 30, 2010. Windstream also sees great growth opportunity, commenting that Hosted Solutions is only at 70% capacity of available square footage. The acquisition will bring Windstream’s data center count to a total of 12.
As we’ve been covering, Windstream has been on acquisition tear for the past couple years. Its last few transactions have a definite enterprise and data focus, including their purchase of Qcom earlier this year and NuVox back in 2009. Their strategy appears to center on leveraging their regulated business and all of the cash it generates to acquire new businesses that help diversify their revenue streams beyond those regulated lines of business.
For Windstream, their past deals seem to indicate they have targeted enterprise data services, rather than say wireless, as their primary diversification strategy. They’re building a pretty impressive enterprise data network footprint as a result.
Other tier 2 carriers like Frontier and FairPoint have hitched their wagon to growing scale dramatically, primarily through Verizon rural territory acquisitions. CenturyLink appears to be doing a hybrid approach – grow scale dramatically, which includes a significant enterprise focus, primarily achieved through their pending Qwest acquisition.