Private Equity Buyout for Data393

Managed Data Holdings, a data center holding company formed by two private equity firms, has bought Denver area colocation and hosting provider Data393, the companies announced this week. The deal, which will help Data393 expand its data center infrastructure, illustrates continuing interest in the data center sector from private equity firms.

This is the second acquisition for Managed Data Holdings (MDH), which was founded in June 2007 by Catalyst Investors and Great Hill Partners, and bought Irvine, Calif. provider Intelenet Communications in October. MDH's strategy is to invest in data centers in Tier I and Tier II markets in the U.S. to meet enterprise demand for managed hosting, colocation space and disaster recovery services. Catalyst's interest in the hosting sector dates to mid-2006, when it acquired Aplus.net.

The Data393 transaction fits a profile also seen in the CyrusOne deal in July - a private equity firm buys a provider that has an existing facility, customers and expertise, but may need deeper pockets to expand its data center infrastructure.

"As the demand for IT infrastructure service continues to grow, our search for a buyer with sufficient capital and industry experience to continue Data393's long term growth strategy and data center expansion led us to select Managed Data Holdings," said Lee Woodward, CEO and President of Data393. "This transaction will allow Data393 to continue its rapid growth and bring additional data center capacity online in early 2008."

Peter Stevenson, Chief Executive Officer of Managed Data Holdings, noted Data393's "proven ability" to deliver data center services. "We believe that moving forward immediately with the expansion of available high density, raised-floor capacity at Data393 and offering customers diverse, multi-site solutions are important additions to an already excellent brand in the marketplace," said Stevenson.

Managed Data Holdings expects to operate the business under the Data393 brand name. "Data393 has experienced phenomenal growth in 2007 and we anticipate that will continue into 2008," said Brett Jones, the new General Manager of Data393. "Managed Data Holdings is committed to maintaining the innovative, robust services and outstanding customer service that have allowed Data393 to become a market leader in the Rocky Mountain region."

Between the Intelenet and Data393 facilities, Managed Data Holdings now has combined high density, raised-floor capacity in excess of 60,000 square feet.