Bay Area Internet Acquired by Private Equity Firm

Private equity firm The Stephens Group has acquired Bay Area Internet Services (BAIS), a colocation provider in Santa Clara with a Tier IV facility. DH Capital served as exclusive financial advisor to BAIS, and The Stephens Group partnered with the vXchnge management team on the transaction. Financial terms of the deal were not disclosed.

“This is an excellent opportunity for our customers and employees,” said Thomas Wye, Chairman and CEO of BAIS. “I am grateful to the DH Capital team for the guidance they provided us every step of the way as we negotiated this strategic transaction."

BAIS provides colocation, managed IT and high speed access services. It completed the first phase of its Santa Clara colocation facility in 2009 and added 83,000 square feet and an additional six megawatts of power in 2010 to support the high-density requirements of an unnamed large new customer. This is a fully redundant, Tier IV datacenter facility constructed with environmentally friendly products and systems, utilizing the newest energy efficient technology and architectural design methodologies. The site won the Silicon Valley Power Energy Innovator Award for its energy efficient technologies and architecture. It features an innovative economizer design.

DH Capital is well known in the Internet infrastructure space, specializing and advising in some high-profile deals in the space, including SoftLayer's sale to IBM. The firm’s principals have extensive experience in capital formation, finance, research, business development in operation.

"We are pleased to have assisted BAIS in this exciting transaction," said Townsend Devereux, Partner of DH Capital. "Tom and his team have built a first class data center business and facility."

"Through this transaction, BAIS is well-positioned to achieve further success with the financial support from The Stephens Group and the successful track record of the vXchnge management team," said Peter Hopper, CEO of DH Capital.

The vXchnge management team, led by former industry veteran Ketih Olsen (formerly of Switch & Data)  adds strong leadership atop of a premier data center asset in BAIS.

"Bay Area Internet Solutions complements the specific value drivers of our business," said Olsen,. "Over the past eighteen months we have visited many data centers, spoken with numerous customers, both of which were instrumental in creating the tenants of the vXchnge value proposition for network centric businesses. The users of data center services continue to seek more efficient places to run their businesses. The need for increased power solutions, being generated from high performance platforms such as Cloud Services, require an architecture, infrastructure and operation not yet available in a choreographed suite of services."

The Stephens Group has been active in the Internet infrastructure space of late. Last month it led a  Notably, it led a Series D Funding round for FireHost, a company known for providing ultra-secure cloud. FirHost has raised a total of $34M in three years, brought secure cloud hosting to the European market, introduced FluidScale, a unique rebootless scaling technology for cloud.

As with FireHost, the Stephens Group is playing at the top-end, premium part of the market with this acquisition.

"The Stephens Group has successfully backed strong management teams for over eight decades," said Robert Covington, Managing Director of Stephens Group. "We have a history of building excellent companies in growth focused markets. By combining the BAIS company with the vXchnge management team, we have the perfect combination of leadership talent and a world class asset."