NaviSite Sells Assets to Velocity

Managed hosting provider NaviSite (NAVI) said Monday that it has sold its Lawson/Kronos Application Services business to Velocity Technology Solutionsfor $56 million in cash. As part of the transaction, all NaviSite's current Lawson/Kronos customers will be transferred to Velocity , which will also assume NaviSite’s lease on an 11,250 square foot Minneapolis data center where the services are hosted. The transaction is effective immediately.

Lawson Software develops Enterprise Resource Planning (ERP) solutions that help customers simplifying their businesses by streamlining processes and reducing costs. NaviSite said it would use the proceeds from the sale to reduce its debt. NaviSite has also been seeking to divest some of its colocation assets as part of a refocusing of its business.

"The sale of our Lawson/Kronos business is consistent with our strategy to focus on providing Enterprise-class cloud computing for large organizations with highly complex environments," said Arthur Becker, Chief Executive Officer of NaviSite. "Our goal has always been to provide the highest level of service, superior application expertise, and unparalleled technology to our customers. By divesting our Lawson/Kronos practice, we will be better able to focus on our core enterprise applications business and accelerate the progress of our NaviCloud suite of solutions."

"Tthis acquisition facilitates a powerful combination of talented professionals, innovative solutions, and advanced cloud-based technologies for the enterprise software market," said Tom Bruno, President and Chief Executive Officer of Velocity. "Velocity is extremely well suited to continue providing an outstanding level of service and deliver the personalized care that customers have come to expect. Velocity has been a business partner with Lawson for more than 20 years. This transaction expands our role in the marketplace and enables us to achieve the critical mass necessary to accelerate our success."