IT Services Firm Cbeyond Buys Web Host MaximumASP for $40M

(WEB HOST INDUSTRY REVIEW) — IT servics provider Cbeyond (www.cbeyond.com) announced on Thursday it has acquired the assets of Web hosting and cloud provider MaximumASP (www.maximumasp.com) and its affiliated companies, as well as the outstanding stock of Aretta Communications.

The combined acquisition is worth $40 million which includes $33 million that was paid at closing and the remaining balance of up to 17.5 percent of the combined purchase price to be paid upon achieving certain future milestones.

MaximumASP provides cloud services such as managed virtual servers and dedicated servers, while Aretta Communications provides cloud services such as private branch exchange and session Internet protocals trunking.

Both companies target small- and medium-sized businesses throughout the US.

Cbeyond says the acquisition of MaximumASP will bring multiple benefits to its business, including entry into a large, high growth cloud services market, expansion of product portfolio into IT services designed for small businesses, a broader geographic opportunity outside Cbeyond’s existing 14-city footprint, new Web distribution and private label reseller channels, and significant cross-selling and up-selling opportunities.

Additionally, Cbeyond sees a greater opportunity to sell Cbeyond’s existing cloud services via the acquired online platform in the future, a new customer economic model based on server virtualization, a 33,000 square foot data center, and a platform to provide additional software and infrastructure as a service offerings.

“The acquisition of MaximumASP and Aretta Communications is an important step forward for Cbeyond’s business,” says Jim Geiger, CEO of Cbeyond. “We believe these acquisitions will provide significant growth opportunities, leverage our existing channels of distribution, and expand our innovative technology and expertise. In addition, we are excited to bring on board a team of talented people and a first class technical platform and data center. We believe that small businesses will be increasingly outsourcing their IT hardware and services to the cloud and that Cbeyond can play a key role in enabling this trend.”

The two acquired companies are expected to earn an aggregate fiscal 2010 revenue of about $12 million.

Cbeyond was advised by The Bank Street Group for the acquisition of MaximumASP.

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