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Cbeyond Acquires Cloud Services Companies

November 09
14:06 2010

Web Host ReviewsATLANTA – Cbeyond, Inc. (NASDAQ: CBEY), a leading provider of IT and communications services to 55,000 small businesses across the country, today announced that it has acquired the assets of privately held MaximumASP and its affiliated companies, as well as the outstanding stock of privately held Aretta Communications.

MaximumASP provides cloud services such as managed virtual servers and dedicated servers, and Aretta Communications provides cloud services such as cloud PBXs (private branch exchange) and SIP (Session Internet Protocol) trunking. Both companies target small- and medium-sized businesses throughout the U.S.

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Cbeyond anticipates the following benefits to its business:

* Entry into a large, high growth cloud services market,
* Expansion of product portfolio into IT services highly relevant to small businesses,
* Broad geographic opportunity outside Cbeyond’s existing 14-city footprint,
* New web distribution and private label reseller channels,
* Significant cross-selling and up-selling opportunities with potential positive impact on the average revenue per customer location (ARPU) of Cbeyond’s current customers,
* Opportunity to sell Cbeyond’s existing cloud services via the acquired online platform in the future,
* Attractive customer economic model based on server virtualization,
* New efficient and scalable company-owned 33,000 square foot data center,
* And extensible platform to provide additional software and infrastructure-as-a service offerings.

“The acquisition of MaximumASP and Aretta Communications is an important step forward for Cbeyond’s business,” said Jim Geiger, chief executive officer of Cbeyond. “We believe these acquisitions will provide significant growth opportunities, leverage our existing channels of distribution, and expand our innovative technology and expertise. In addition, we are excited to bring on board a team of talented people and a first class technical platform and data center. We believe that small businesses will be increasingly outsourcing their IT hardware and services to the cloud and that Cbeyond can play a key role in enabling this trend.”

The combined transaction value is approximately $40 million, payable in cash, of which approximately $33 million was paid at closing and the balance, up to 17.5 percent of the combined purchase price, will be paid upon achieving certain future milestones. The aggregate fiscal 2010 revenue of the two acquired companies is expected to be approximately $12 million. Cbeyond was advised by The Bank Street Group for the acquisition of MaximumASP.

About Cbeyond
Cbeyond, Inc. (NASDAQ: CBEY) is a leading provider of IT and communications services to more than 55,000 small businesses throughout the United States. Recently named as the sixth fastest growing technology company by Forbes magazine, and added to Standard & Poor’s Small Cap S&P 600 Index, Cbeyond offers more than 30 productivity-enhancing applications including local and long-distance voice, broadband Internet, mobile, BlackBerry(R), broadband laptop access, voicemail, email, web hosting, fax-to-email, data backup, file-sharing and virtual private networking. Cbeyond delivers these services over a 100 percent private all IP network.

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The 'Web Hosting Blog' at FindMyHost.com was established to provide the web hosting industry with the very latest in news, technology, interviews, event information and more. About FindMyHost.com: Launched in January 2001 to protect Web Host Consumers and Web Developers from making the wrong choice when choosing a Web host. FindMyHost.com showcases a selection of web hosting companies who have undergone our Approved Host program testing and provides reviews from customers.

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