Solutions Gets Funding
Dallas-based provider gets $3.3 million from group led by Koch Industries
Sept. 27, 2002 -- Data center services provider Collocation
Solutions, LLC, has raised $3.3 million in a private round of
debt financing led by Koch Telecom, LLC and includes existing
investors Hunt Capital Growth Fund II, L.P. and BG Media Intermediate
Solutions operates two data centers at the Dallas Infomart, and
one apiece in Austin, Texas and Las Vegas.
new cash will fund our growth as well as provide reassurances
to our customers," said Jim deVenny, president and chief executive
officer of Collocation Solutions." This ensures stability
for us, which is what enterprise companies are looking for.
"There is a flight to quality from customers who have outsourced
their mission-critical IT to firms that are financially distressed,"
deVenny added. "Those customers see Collocation Solutions
as a reliable provider in our industry, and that is important
Collocation Solutions, which is privately-held, was founded in
1999 and has pursued a cautious growth strategy, locating at least
one major tenant for each new data center.
"From the early stages, we've followed the anchor tenant
strategy," said deVenny. "We stopped our rollout at
four, when the industry started having its problems. We've been
a conservative business, and that was attractive to (Koch Telecom)."
Koch Telecom is a subsidiary of privately held Koch
Industries, Inc., which is based in Wichita, Kansas, a conglomerate
with holdings in industries ranging from petroleum refining and
industrial equipment manufacturing to plastics and information
In addition to the financing, Koch's business solutions unit will
make Collocation Solutions' services available to the diverse
group of affiliates to which it provides IT infrastructure solutions.
"We were impressed with their focus on servicing larger enterprises
and the caliber of their anchor customers," said Koch Telecom
vice president Steve Kromer.
of Collocation Solutions
include Electric Lightwave, a subsidiary of Citizens Communications,
and the Wyndham International hotel chain.
"We are pleased at the commitment shown to our company and the
belief in our business model," said Don Frasier, executive
vice president of Collocation Solutions.
"It allows us to proceed with the development of the large
opportunities we are involved with."
For the moment, the primary focus will be adding customers in
its existing centers, according to deVenny. But he doesn't rule
out expansion if the right facility comes along.
going to continue to mature our sites," he said. "As
we continue to see opportunities for consolidation, we think we
can be a player."