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Article

Time Warner Cable Buys into the Cloud

The deal brings Time Warner 10 data centers in the US and UK and roughly 1,200 customers

Time Warner Cable is buying NaviSite for $5.50 a share, which works out to $230 million cash, a 33% premium.

NaviSite is a roughly $125 million-a-year web hosting and collocation outfit that in the fashion of the times now has a managed cloud platform.

The move is reminiscent of Verizon buying Terremark last week for $1.4 billion.

It obviously paid for NaviSite to hold out. Last July it got a $3.05-a-share offer from Atlantic Investors, a New York outfit that already owned a third of it.aaaa

The deal brings Time Warner 10 data centers in the US and UK and roughly 1,200 customers including clients in financial services, healthcare, industrial manufacturing and government agencies. Two of NaviSite’s data centers are SAS 70 Type II-certified and it’s also got network operations centers in Gurgaon, India and Andover, Massachusetts, where it’s headquartered.

On the managed applications side NaviSite specializes in setting up and supporting ERP software such as Microsoft Dynamics and Oracle as well as Lotus and Exchange messaging.

Time Warner Cable, the second-largest cable TV provider in the US, with a decent chunk of the residential broadband market, said it would use the acquisition to get into managed services for small and medium-sized businesses, adding to its Business Class commercial services, which the company sees as a key growth center.

The operation currently offers a suite of phone, Internet, Ethernet and cable television services to businesses of all sizes.

NaviSite has about 570 people worldwide.

The acquisition, expected to be accretive, should close next quarter.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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