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 Fund, LP
Collocation Solutions operates two data centers at the Dallas Infomart, and one apiece in Austin, Texas and Las Vegas.
"The 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 right now."
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 technology.
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.
Customers 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.
"We're going to continue to mature our sites," he said. "As we continue to see opportunities for consolidation, we think we can be a player."