Credit Line Will Fund Internap Colo Expansion
September 19th, 2007 By: Rich Miller
Internap Network Services (INAP) is the latest company to line up additional financing to support its infrastructure plans. The company said Tuesday that it has closed a new four-year senior secured credit line from Bank of America. The agreement includes a $5 million revolving credit facility (which may be increased by $15 million) and a $30 million term loan facility.
The Atlanta company, which provides intelligent routing services that help bypass Internet congestion points, said it will use the proceeds to refinance existing debt and fund the expansion of its colocation facilities. Internap has announced a series of facility expansions over the past two years, including several additions to its Seattle colo space, and expansions in Toronto, Los Angeles, Boston and New York. The latest expansion, a $40 million initiative announced in June, did not identify the specific cities targeted for new colo space.
“Internap is focused on capturing the significant growth opportunities before us while operating the business with prudent cost controls,” said David A. Buckel, chief financial officer of Internap. “Our strong financial performance and balance sheet have enabled us to secure a favorable credit facility despite a challenging macro economic environment. This financing will support our expansion initiatives in a cost effective and flexible manner and allow us to execute against our aggressive business plan.”
Internap also announced this morning that it is providing its Flow Control Platform (FCP) to HostMySite.com, a Newark, Delaware based web hosting company.
Paolo GorgoPosted September 19th, 2007
>>The latest expansion, a $40 million initiative announced in June, did not identify the specific cities targeted for new colo space.
Internap operates directly data centers in Atlanta, Boston, Houston, New York and Seattle. The other data centers used by Internap are operated by specialised colo partners like Equinix, Navisite, Switch and Data, etc., and Internap is simply renting more space there on a “when needed” basis.
It probably makes sense to assume that the $ 40 million investment is targeted at increasing the built out space in their own data centers, that are today at only about 17% occupancy (In total, they should be around 420,000 sqft.). Unfortunately Internap is not releasing information about size and occupancy on a single location basis.
Internap is expecting to add slightly less than 40,000 sqft of built out space through this initiative. Margins generated in their own data centers should obviously be above average for the Company.
On a different subject, Internap has just been awarded a new patent:
>>System and method to assure network service levels with intelligent routing
United States Patent n. 7,269,157
September 11, 2007
The patent application was originally filed in 2001.