Telx Raises $43 Million for Expansion
June 3rd, 2009 By: Rich Miller
Interconnection specialist Telx has lined up $43.5 million in new financing from CIT and RBC Capital Markets, providing the company with capital to continue to grow its core markets, and consider expansion into new cities. The financing replaced an existing term loan for Telx, providing additional funding for new projects. Terms of the transaction were not disclosed.
CIT, which made the loan through its Communications, Media & Entertainment group, has been a financing partner for Telx since 2007, while RBC Capital Markets is a new lender. The lenders cited Telx’s sustained growth, strong business model and customer base, and the strength of the data center market as a whole. Telx reported 39 percent revenue growth in the first quarter of 2008, compared to the same period last year.
Telx said its business plan was fully funded under its former financing, and the new deal provides “significant opportunities to enhance capabilities and explore new technologies that will expand the services that Telx is able to offer its customers.”
Telxplans to use the additional funding to expand in existing cities to meet ongoing customer demand. The company has steadily expanded its colocation footprint over the past two years, adding space in Dallas, New York, New Jersey, San Francisco and Chicago.
Telx, which has a strong focus on connectivity-rich financial market hubs, said it will also “give consideration to entrance into new markets as needed.” Since the company already has operations in New York and Chicago, potential new markets might include European financial centers like London or Frankfurt.
“Despite a challenging economy, Telx continues to experience solid revenue growth across multiple market verticals,” said Chris Downie, President and Chief Financial Officer for Telx. “The company’s business model has proven itself not only viable, but strong, and we expect to continue to deliver the same positive results in the coming years based on industry demand for colocation and interconnection services in our facilities. We’re pleased to have CIT and RBC, who each has an in-depth knowledge of our industry, as our financial partners and appreciate their support for our continued business endeavors.”
“We were pleased to arrange this financing for Telx, which has experienced significant growth over the past four years,” said Joseph E. Junda, Senior Director of CIT Communications, Media & Entertainment. “This transaction represents our continued support for companies in the growing telecommunications sector.”