Mar. 27, 2002 -- NaviSite continued its acquisitive ways today, signing a definitive agreement to purchase Conxion Corporation, a Silicon Valley-based managed services provider.
Under the terms of the deal, NaviSite will acquire Conxion through the merger of a NaviSite wholly-owned subsidiary into Conxion. NaviSite will pay $1.925 million in cash at closing, and the two companies will "favorably restructure certain long-term commitments and obligations."
Founded in 1995, Conxion brings to NaviSite established channel relationships with IBM and Infonet, over 195 customers, and Internet infrastructure throughout the United States and the United Kingdom.
NaviSite is the primary operating unit of the US hosting assets controlled by Unicorn Holdings, whose principals founded Global Switch. On Dec. 31, Unicorn-owned ClearBlue Technologies integrated the providers it acquired in the previous 15 months - including assets of COLO.COM, Applied Theory and NaviSite - with the operating units going forward as NaviSite.
NaviSite then purchased Avasta, Inc. in early February, and conducted an internal reorganization in the last month.
"Today, NaviSite is a service company," said Arthur Becker, CEO of NaviSite. "We are carefully working to build a profitable, leadership position in the managed services industry.
"The acquisition of Conxion is another important step in the execution of the new NaviSite market strategy," said Becker. "Conxion brings complementary skills, innovative self-service software products, as well as a strong and loyal customer base."
"We are really enthusiastic about joining forces with NaviSite, and I am confident about the NaviSite leadership team and what we can do together," said Antonio Salerno, Chairman, Chief Executive Officer and founder of Conxion. "Our combined strength across product offerings, service innovation and support make sense for all of our customers."
That customer base includes Computer Associates, Forbes.com, LSI Logic, Oracle, and Weatherbug.
Earlier this week NaviSite said it renewed 80 percent of its enterprise customer contracts in the three-month period ending Jan. 30.
"This is a big change from just a few months ago," said Will O'Keeffe, NaviSite Director of Customer Relationship Management. "Customers were so unsure of the future, many of them opted to bring their operations in-house; even if it didn't make financial and operational sense."
NaviSite officials said they expect the deal to continue to build momentum for the company's service offerings and market position.
"We intend to integrate Conxion into the NaviSite operating platform and begin realizing the revenue and cost synergies as quickly as possible," said Kevin Lo, CFO and acting COO of NaviSite.
"We are very enthusiastic about the progress made in a very short time and continue to be enthusiastically committed to building a profitable market-leading future for NaviSite," said NaviSite chairman Andy Ruhan. "A key indicator of this progress is our current success in delivering sustainable gross margin profitability, demonstrating why we strongly believe that this business will grow and succeed."