GI Partners Leads Buyout of SoftLayer

SoftLayer recently moved its headquarters and expanded data center operations to this Digital Realty Trust building in Dallas.

Private equity firm GI Partners has backed a management-led buyout of growing IT infrastructure specialist SoftLayer Technologies, the companies said today. Financial terms were not disclosed. The transaction continues the strong mergers and acquisition activity in the data center and hosting sector in 2010.

The deal also deepens the influence of GI Partners in the data center sector, where it already owns The Planet and Telx and recently gained an minority equity interest in ViaWest.  SoftLayer’s executive team will continue to operate and manage the company.

“SoftLayer has taken a visionary model and created a company for the future of hosting,” said Rick Magnuson, Executive Managing Director of GI Partners. “We are excited to bring additional resources and experience to help SoftLayer leverage its strategic position in the expanding global data center services market.”

SoftLayer had $60 million in revenue in the first six months of 2010, and expects to top $125 million for the full year. The company just moved into a new headquarters facility in Dallas, which will include three new data centers. SoftLayer also deployed new network points of presence in seven additional cities. SoftLayer has 6,000 customers and more than 30,000 servers under management.

SoftLayer was founded in 2005. Last September the company closed on $20 million in senior notes from a private investment group, and later added another $10 million.

“I’m extremely proud of how much SoftLayer has grown and accomplished in its history,” said Lance Crosby, Chief Executive Officer of SoftLayer. “GI Partners’ investment and partnership enables us to take our unparalleled approach to the next stage. It’s gratifying that a firm with GI Partners’ insight and success sees such value in SoftLayer’s past growth and future opportunities.”

DH Capital served as exclusive financial advisor to SoftLayer in connection with the transaction.

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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