INetU Set to Expand After Private Equity Investment

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Managed hosting and cloud service provider INetU is set to expand its operations following an investment from BV Investment Partners, which is now the majority shareholder in the company. INetU will use the funds to help accelerate growth initiatives, expanding both geographically and its cloud services for business.

“INetU will continue its global expansion with a Seattle, Washington location early this year,” said David Van Allen, VP of Sales and Marketing. “Our recently released suite of PCI and HIPAA security products and services is scheduled for additions and enhancements in 2013.”

The Seattle facility will provide a West Coast facility for INetU, which has most of its data center infrastructure near its headquarters in the Lehigh Valley of Pennsylvania. The ability to provide out-of-region backup is an important capability for many enterprise customers seeking disaster recovery services.

Chanchani Continues as CEO

The investment and recapitalization by BV is being made in partnership with INetU’s founder and CEO, Dev Chanchani, who will stay on as President and CEO and remain a significant shareholder in the company.

“Our new partnership with BV will help accelerate our growth initiatives and we look forward to continuing to provide our customers with world class services and new innovative business cloud solutions,” said Chanchani.  “BV has a long history of successfully partnering with and growing founder-owned companies, and my senior management team and I look forward to working with them.”

Founded in 1983, BV has invested over $2.6 billion in over 80 companies. INetU is the first investment in BV’s latest investment vehicle, BV Fund VIII, its eight private equity fund.

“We are delighted to start the investment program of Fund VIII with INetU,” said Vik Raina, Managing Partner of BV. “This investment is consistent with our strategy of partnering with fast growing, founder-owned businesses in the communications and information and business services industries and helping them to achieve their growth plans.”

Private Equity As A Growth Driver

The investment in INetU follows a familiar story line in the data center industry: a private equity firm buys up a successful local operator with experienced management, and then provides capital for expansion into other markets. BV clearly sees an opportunity in the sector.

“We believe the rapid growth in data generation and the proliferation of web-based applications and services are changing the way companies address their IT infrastructure needs,” said Louis Bertocci, a Managing Director at BV. “INetU is truly a value added partner providing mission critical IT services to a large and growing customer base.”

Bertocci and Matthew Kinsey from BV have joined INetU’s Board of Directors.

INetU was founded in 1996 and is headquartered in Allentown, Pa.. The company specializes in enterprise managed and cloud hosting, supporting several applications and websites in eCommerce, healthcare, financial services, SaaS, education, and government. Focusing on Business hosting, the company has a strong story in terms of compliance. It is PCI, SSAE 16/SOC 1, SOC 2/3, ISAE 3402 and Safe Harbor compliant and provides HIPAA guidance and assurances.

About the Author

Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.

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