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[October 03, 2006]

Globix Selling its US Hosting Business to Quality Technology Services for $20M

TMCnet Associate Editor
 
Seeking to build on its success as one of the nation’s largest privately held hosting and managed services companies, Quality Technology Services today announced that it plans to acquire Globix Corporation’s US hosting business for $20 million (USD).

Globix, a provider of Internet infrastructure and network services, will reportedly use the proceeds from the transaction - which is subject to the usual regulatory approvals and closing conditions - to pay down indebtedness and “for other corporate purposes.” The company, which is in the process of restructuring, announced in August that it was selling its wholly-owned subsidiary, Globix Holdings (UK) Limited (“Globix UK”) to TelecityRedbus, Europe’s leading independent provider of colocation and data center services, for $62 million (USD). Plus, just last month Globix announced that it was selling its New York City headquarters (consisting of three plots on Centre and Lafayette Streets in Manhattan) to a group of investors for an estimated purchase price of $51,837,500.

According to Quality Technology Services CEO Chad Williams, the acquisition of Globix’ US hosting business fits well with Quality’s ongoing strategy to expand its national footprint by adding more hosting products and services to its portfolio. In a press release he said the deal brings Quality “one step towards achieving our goal to be the premier provider of managed services and data center facilities in the country.”

Globix, meanwhile, will be benefit from the sale not only because it will help the company pay down its debt, but also because it will enable it to focus exclusively on its NEON network business (Globix acquired NEON back in 2004).

“The agreement announced today represents a significant milestone in Globix’ review of strategic alternatives,” said Ted Lodge, chairman of the board of directors and executive chairman of Globix, in the press release. “In Quality, we believe we have found an excellent partner for our U.S. hosting customers and employees.”

Back in March, Globix announced that it had hired the investment banking firm of The Bank Street Group LLC to assist it in reviewing strategic and financing alternatives for the company and its businesses. The recent transactions are reportedly an outgrowth of that review.

With today’s announcement, Quality also announced that it will be opening a new 960,000 square foot facility in Atlanta, Ga., as well as a new office in the New York area. With the opening of these new offices, in addition to the acquisition of Globix’ US hosting offices, Quality will bring its portfolio to more than 1.5 million square feet.

For more information about Quality Technology Services, visit www.qualitytech.com.

For more information about Globix Corporation, visit www.globix.com.

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Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.

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