HostMySite Buys Hosting.com

When Wachovia Capital bought HostMySite last year, it was clear that the Delaware provider would serve as a beachhead for larger ambitions in the hosting and data center space. To run the company, Wachovia hired Art Zeile and Joel Daly, who previously built a successful national managed hosting franchise with InFlow.

The building has begun. On Tuesday HostMySite announced that it has acquired Hosting.com, adding a premier brand and national footprint of data center facilities. The combined company will have 43,000 square feet of data center space in four markets, providing enterprise customers with the ability to house data in multiple regions for disaster recovery purposes. The data centers are in Newark, Del.; Louisville; Irvine, Calif. and San Francisco.

The sale price was not disclosed. Wachovia Capital Partners provided an additional equity investment to support the acquisition and Golub Capital provided a $22 million senior credit facility. HostMySite said the acquisition builds on the company's focus on strong support and provides the right mix of services.

"We have listened closely to our customers and they have told us that they desire both managed colocation and managed dedicated solutions for their applications," said Zeile, the CEO at HostMySite. "With this acquisition, we have made a firm commitment to delivering a full spectrum of managed hosting services across a national platform."

"Customers will continue to experience the same extraordinary level of customer support that has made us a trusted partner to thousands of customers over the last 11 years," said Daly, the chief operating officer. "We pride ourselves in having the best team in the industry and look forward to delivering the same high-quality service through our expanded roster."

Former Hosting.com CEO Darren King said the deal with HostMySite "provides an opportunity to expand upon (the company's services) and deliver these to a significantly larger number of clients."

Wachovia Capital said the relationship with Golub Capital as a key deal enabler. "In a market where few lenders are lending, Golub Capital quickly recognized HostMySite's strengths and delivered an attractive financing solution to facilitate the transaction," says Scott Stevens, a Principal at Wachovia Capital Partners. "The acquisition of Hosting.com positions the company for continued growth, and we are confident in Golub Capital's ability to support that growth."

"HostMySite is exactly the type of company we are excited to partner with in this difficult economic environment," says Golub Capital Principal Troy Oder. "Despite challenging market conditions, the company's performance has been strong, and its business model has proven to be resilient. WCP and management have done an excellent job building a platform with meaningful scale and diversity."

HostMySite says the company is cash flow, EBITDA and net income positive, and grew its revenues by 34 percent and EBITDA by 76 percent between the first quarter of 2008 and 20s09. The company has 230 employees and hosts 40,000 web sites.

HostMySite has an FAQ page for Hosting.com customers. But a key question remains unanswered: will the company stick with the HostMySite brand or seek to leverage the Hosting.com domain and brand?