Disaster recovery specialist SunGard has reached a definitive agreement to acquire VeriCenter, Inc., a Houston provider of managed hosting, colocation, and infrastructure services. Terms were not disclosed, but Sungard said the deal isn't expected to have a material impact on its financial results.
Sungard has annual revenue exceeding $4 billion, with more than 25,000 customers in more than 50 countries, including the world’s 50 largest financial services companies. Vericenter will become part of Sungard Availability Services, which operates more than 3 million square feet of hardened facilities. Sungard Availability services range from 48-hour disaster recovery hotsites to always-on, high-availability infrastructure and electronic vaulting services.
VeriCenter hosts 600 customers on its network of seven data center facilities, which include 470,000 square feet of capacity. The company reported second quarter 2007 bookings of $7.2 million in annual recurring revenue, with 75 percent of its revenue from managed services and the remainder from colocation.
The acquisition of VeriCenter adds to Sungard's data center footprint, and adds additional managed service capabilities to SunGard’s service offerings. Vericenter hosts business applications, Websites, Software-as-a-Service, and messaging and collaboration applications.
"The powerful blend of SunGard’s deep portfolio of information availability services, VeriCenter’s strong facility footprint and the world class expertise of our combined team will further enhance the ability to help protect customers’ mission-critical people, systems and applications," said Ted Gaasche, chief executive officer of SunGard Availability Services.
"SunGard is a best-in-class business continuity services provider and it has a rapidly growing managed services business," said Gray Hall, chief executive officer of VeriCenter. "More of VeriCenter’s customers seek a total availability solution from a single vendor, and combining our managed services delivery with SunGard Availability Services will help meet this need. Together, we can serve customers that seek business continuity, managed services or the blend of the two."
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By Rich Miller 
July 16, 2007 | Permalink | >Get Posts By E-mail
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Comments
I'm surprised Vericenter's revenue isn't higher. Only $7M/quarter from a 470,000 SF portfolio? And 75% of that is from managed services? So their data center facilities are only bringing in $7M/year, which is just over $15 per square foot?
In contrast, you mentioned last year that Digital Realty Trust is renting unfinished space for $30 psf and finished space for $100+?
Posted by: Isabel Wang at July 17, 2007 10:32 AM
The deal seems like a pure sq footage play. Vericenter has a lot of space and low overall utilization.
Has anyone heard anything on price or multiples?
Posted by: sj_miller at July 17, 2007 11:14 AM
As sj_miller notes, Sungard's interest is driven by the large amount of vacant data space in Vericenter's 470,000 square foot portfolio, which Sungard can fill with DR/business continuity clients.
I don't have any info on price or multiples as yet. But Sungard clearly must have liked the way the buy vs. build numbers stacked up.
Isabel: re Digital, we have more current information in an analysis of their leasing info from year-end 2006, which shows some of the variations by geography:
Posted by: Rich Miller at July 17, 2007 12:07 PM