Time Warner Cable Buys NaviSite for $230 Million

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The cloud computing buyout binge blitz is on. Time Warner Cable will acquire managed hosting and cloud services provider NaviSite for $230 million, marking the second deal in a week in which a major network operator has bought a cloud service provider. Last Thursday Verizon said it would buy Terremark for $1.4 billion.

Time Warner Cable (TWC) said it would pay $5.50 for each share of NaviSite (NAVI) , representing a 33 percent premium to today’s closing price of $4.13. Time Warner said it saw hosting and cloud services as a “great opportunity.”

“NaviSite provides us with a successful managed services business and a new, innovative managed cloud platform representing significant new growth opportunities,” said Glenn Britt, Chairman and CEO of Time Warner Cable. “We expect to build upon NaviSite’s successful enterprise-class offerings, and their operational capabilities, infrastructure and expertise to more rapidly create a robust managed services offering for small and medium sized businesses. This transaction is consistent with our capital allocation strategy – selectively investing in our business to accelerate growth while continuing to return capital to shareholders.”

NaviSite has 1,200 customers in its 10 data centers in the United States and the United Kingdom, and has network operations centers in Gurgaon, India and Andover, Massachusetts.

The deal caps a remarkable turnaround for NaviSite shares, which traded for just 26 cents in early 2009 as the company struggled with its debt load in the wake of the U.S. economic meltdown and resulting credit crunch. The company spent much of 2010 shedding assets in order to pay off debt and tighten its focus on enterprise customers for its managed hosting and cloud portfolios.

“On behalf of all the employees of NaviSite, we are delighted to join the Time Warner Cable family,” said R. Brooks Borcherding, President and CEO of NaviSite. “Our valued customers can rest assured knowing that NaviSite and Time Warner Cable are committed to helping them grow their businesses and to delivering the reliability, innovation, and customer service they have come to expect. We also look forward to powering Time Warner Cable’s development of innovative managed and cloud services for its commercial customers.”

About the Author

Rich Miller is the founder and editor-in-chief 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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  1. There are a lot of channels being continuously taken away from the Time Warner app, which is why I am glad that I have DISH Network. Using the DISH Remote Access app and my 922 SlingLoaded receiver, I am able to stream live TV and recorded shows to my iPad when and where I want. The Time Warner app can only be used on a home network that is provided by Time Warner as well. That does not seem very flexible. The DISH Remote Access app lets me watch TV anywhere that I have a 3G or wifi connection. This comes in handy when I want to keep watching all of my favorite shows on the go. One other plus is that I can watch any channel that I subscribe to!