In a move to expand its cloud business, China-based data center service provider 21Vianet Group, Inc. has acquired Fastweb International Holdings, a content delivery network (CDN) services provider in China, for approximately $20 million.
As China’s largest carrier-neutral Internet data center services provider, the addition of Fastweb’s CDN footprint and cloud technology products will help to diversify and improve the quality of 21Vianet’s products, according to Josh Chen, founder, chairman and CEO at 21Vianet.
“By leveraging Fastweb’s established expertise and capabilities, we will enhance our service offerings as well as cross-selling opportunities,” Chen said in a company statement.
With the acquisition of Fastweb, 21Vianet gains a large content delivery network with more than 150 points-of-presence (POP) located across China, Fastweb’s proprietary CloudCDN platform software, as well as a portfolio of cloud enabling technology solutions.
Under the terms of the acquisition, Edward Liu, CEO at Fastweb, will join 21Vianet as chief software officer.
Prior to Fastweb, Liu was the director of business development at Akamai (News - Alert) Technologies Inc., one of the world’s leading CDN service providers.
“In addition, we are very excited to have Edward join our team. His wealth of experience in working with global CDNs over the past 25 years is a welcome addition and will further help the development of our CDN and cloud computing capabilities,” Chen said.
This product portfolio provides clients with a cost-effective solution to their data connection needs in China, improving the reliability, scalability, security and speed of their Internet services, he added. Fastweb offers self-developed CDN caching engine, back-end administrative BOSS system and a customer service portal.
The total consideration for the acquisition was based upon 5 to 7.35 times the average of Fastweb’s 2012 and 2013 EBITDA to be paid in a combination of equity and cash, in the aggregate amount not to exceed $20 million.
In August, 21Vianet reported Q2 net revenue for 2012 increased by 58.2 percent to $57.4 million. Net revenue from hosting and related services increased by 40.8 percent $32.3 million in the second quarter of 2012, primarily due to an increase in the total number of cabinets under management in both the company’s self-built and partnered data centers, which company officials attributed to growing customer demand.
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Edited by Braden Becker