Defying an historic credit crunch, The Planet said today that it has secured a new $45 million credit facility, with Wachovia Bank supplying $30 million while Bank of America chips in $15 million. The Houston-based company, which specialized in dedicated servers and managed hosting, said it will use the funding to expand, perhaps through acquisitions.
“This financing will fund our demand-driven expansion plans and strategic initiatives over the next few years,” said Doug Erwin, The Planet’s Chairman and Chief Executive Officer. “In the near future, we will make several announcements relative to our strategic areas of investment.”
The Planet did not announce the terms of the financing. But at a time when the interbank lending and commercial paper markets appear frozen, the funding is notable. “Given the unprecedented economic environment, this financing facility is a testament to The Planet’s consistently strong performance, as well as its healthy balance sheet and solid cash flows," said Kevin Klausmeyer, The Planet’s Chief Financial Officer. "Adding to our excitement, we just concluded another strong quarter, once again achieving record top-line growth.”
In July, The Planet said it was expanding its offerings beyond its historic core focus on the dedicated server market, adding a suite of managed hosting services dubbed Planet Northstar. The new push into managed hosting also allows The Planet to diversify beyond dedicated hosting, which is under threat from cloud hosting and utility computing models that offer the prospect of more flexible, scalable hosting platforms.
The current version of The Planet was formed in 2006 when private equity firm GI Partners acquired the two largest dedicated hosting providers, The Planet and EV1 Servers. The two companies operations were combined, and in late 2007 The Planet opened a new headquarters building in Houston.