Infocrossing Raises $76M

The funding drought for the data center sector appears to be coming to an end. Just two days after Equinix announced plans to sell $150 million in common stock, New Jersey IT outsourcing provider Infocrossing today announced that it has secured $76.5 million in a private placement. The funds will be used to retire its Series A preferred stock and warrants. The four members of the company's board who were nominated by holders of the Series A issues will step down once the transaction is completed, the company said.

"Our new and existing shareholders have the opportunity to participate in the future of a financially stronger company," said Zach Lonstein, Chairman and Chief Executive Officer of Infocrossing. "We are very pleased to have reached this agreement with our preferred shareholders. This agreement, combined with the private placement, will substantially re-capitalize our balance sheet, simplify our income statement, and contribute to both our financial strength and profitability. Furthermore, both current and potential customers can gain confidence because we expect to generate both net income and positive cash flow. Consequently, we believe that our historic sales cycle may contract."

The $76.5 million is being raised through the sale of warrants to "accredited investors" in a private equity placement exempt from SEC reporting rules. The warrants will have an exercise price of $7.86 per share of common stock and expire in October 2008.