In what could be the kickoff of a string of consolidations and acquisitions in the highly competitive CDN industry this year, Winter Park, Fla.-based Highwinds, today announced it had purchased Internet infrastructure service provider BandCon, based in Costa Mesa, Calif., in a cash and stock transaction that's highly tied to earn out.
Highwinds Chairman and CEO Steve Miller told FierceOnlineVideo the acquisition helps expand the company's base by some 300 customers ranging from collocation to transport to transit to CDN customers that "could leverage our international network for growth."
The deal, he said, comes from Highwinds recent refinancing of its senior debt in February.
"In the wake of that refinancing we're looking at strategic opportunities that would expand our business in the growth market of content delivery and network services and BandCon, was an opportunity that we believed would give us double the network capacity in the United States and more peering," Miller said. "It was a company that had good momentum, but did not have the right available capital to grow. They would have needed tens of millions of dollars of capital to be able to build a network the size of Highwinds."
It also should help Highwinds approach the $100 million revenue mark this year, Miller told FierceOnlineVideo, up from about $65 million in 2009. And, he said, it sets a course for increased revenue flow in coming years as the combined resources of the companies mature.
The purchase creates an international network with 2 terabits per second of edge capacity and more than 70 POPs worldwide. The combined company now offers a full range of services including:
- Content Delivery Services
- Hosted IP Services and Software
- IP Transit and Transport Services
- Content Storage and Protection Services
- Colocation and Peering Solutions
"The acquisition of BandCon is highly accretive and significantly boosts the scale of Highwinds' content delivery, network and IP services business," said Steve Liddell, recently named president of Highwinds' CDN and network services.
BandCon founder and CEO Ari Benowitz will stay on as chief revenue officer of Highwinds and report to Liddell.
"One of the most interesting parts of this for us, was that this was not a scenario where Ari was cashing out," said Miller. "It was a scenario where he was really excited about being part of the team, reporting directly to Steve Liddell as chief revenue officer of the combined companies. So, he's focused on growing our revenue. He'll be an integral part of growing this company and his incentives are in line with every executive in this company."
- see this release
An interview with Highwinds CEO Steve Miller