Breakthrough for Navisite

It's been a breakthrough week for NaviSite, which has been among the most aggressive acquirers of distressed hosting assets in the past two years. The company's faith in the long-term outlook for managed hosting was rewarded with a major expansion of a government contract and a big pop in its stock price.

Back on Nov. 24, shares of the Andover, Mass. provider were trading at $5.07 a share. The next day, the company announced that the New York State Department of Labor is adding $52 million to its existing contract with NaviSite's ClearBlue Technologies Management unit. Navisite provides the state with development and hosting services for America's Job Bank, a labor exchange network that links employers and job seekers.

NaviSite shares jumped to $7 that day, and by Monday traded as high as $9.97 a share before closing today at $8.60. Back in April you could bought shares for $1.25.

NaviSite is the primary operating unit of the US hosting assets controlled by Unicorn Holdings, whose principals founded Global Switch. In the past 18 months, the company has bought the assets of COLO.COM, Applied Theory, NaviSite, Avasta, Conxion and Interliant.

America's Job Bank was among the clients acquired from Applied Theory. The site currently has more than 600,000 resumes posted and 960,000 job openings for government and private sector jobs, and gets 5.5 million hits per week. The new commitment amends its existing five-year, $83 million hosting and services contract, by providing up to an additional $52 million to meet the projected contract needs until the expiration of the contract in 2005.