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Vericenter Closes Sprint Deal

Carrier Hotels Staff Posted Jan 14, 2004

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Managed hosting provider VeriCenter Inc. has confirmed its purchase of parts of Sprint’s hosting business, including data centers in Boston, Atlanta, Dallas and Denver, and customers from Sprint's DellHost and E|Solutions operations.

The deal, which has been in the works since October, gives Houston-based Vericenter more than $45 million in revenue, profitable operations and a national footprint. It also adds to its existing customer base of more than 400 businesses.

"The transaction catapults VeriCenter from a regional to a national player, positioning them in the top tier of managed hosting providers," said Andrew Schroepfer, president of telecom research firm Tier1 Research. "It elevates VeriCenter’s critical mass of enterprise and government customers and its growing portfolio of services."

"This acquisition is a significant move for VeriCenter," said CEO Gray Hall. "The market for outsourcing enterprise applications is growing rapidly and the managed services industry is still quite fragmented. This transaction strengthens VeriCenter’s core business of delivering enterprise-class managed hosting solutions and establishes our critical mass within a consolidating industry."

The deal also includes a marketing agreement under which VeriCenter can provide services to Sprint customers as a preferred managed hosting partner.

VeriCenter has also raised $10 million in additional venture capital funding, led by Sage Venture Partners.

Between the Vericenter deal and the sale of the Santa Clara data center and customers to Equinix, Sprint now has just three data centers remaining, in New York, Los Angeles and Sacramento, Calif. Tier 1's Schroepfer estimates that about $10 million of Sprint's hosting revenue remains in the available data centers.