Hosted Solutions Acquired for $140 Million

Regional data center specialist Hosted Solutions has been acquired by ABRY Partners for $140 million, the two companies announced Tuesday. The deal is the second acquisition of a regional provider by ABRY, a Boston-based private equity firm that bought Houston's CyrusOne last July. The Hosted Solutions management team will continue to lead the company from the company's Raleigh, NC headquarters.

"This is an incredible milestone for our business," said Rich Lee, founder and CEO of Hosted Solutions. "Partnering with ABRY Partners provides us with the capital to fulfill our vision and accelerates our strategic growth plans."

ABRY has completed more than $21 billion in transactions, and has invested in expansion at CyrusOne, which has added space to its Houston facility and just announced a new Dallas data center.

"Hosted Solutions operates an incredibly strong business," says C.J. Brucato, Partner of ABRY Partners. "They've built a leading company in a market with great growth prospects. What impressed us most about Hosted Solutions is the quality of operations, the focus on customers and the controlled manner in which they've grown. They're a profitable business generating strong revenue today and we see tremendous potential for the business to continue to grow and expand."

ABRY is clearly focused on opportunities for data centers in second-tier regional markets. Many regional players have proven expertise in building a data center business in local markets, but lack the financial muscle needed to expand in the capital-intensive data center market.

"Over the last seven years, we've built a business that we're incredibly proud of, growing in a controlled, strategic way to become a profitable company with five state-of-the-art data centers and a reputation for providing world class service," said Lee. "Our employees and customers will see great benefit from this transaction as ABRY is a long-term partner that shares in our commitment to continue to grow the business and set the standard in the industry for service and innovation."

Hosted Solutions was founded as Springboard Managed Hosting, and initially focused on the Research Triangle market with two facilities apiece in Charlotte and Raleigh. In 2006 the company acquired Boston Datacenters to enter the New England market. Hosted Solutions was represented by DH Capital, LLC, an investment bank specializing in the data center and managed hosting industries.