Friday, April 8, 2005
Minneapolis / St. Paul Business Journal
by Mark Reilly Staff Writer
Agiliti Inc., the Twin Cities tech firm that successfully navigated the twin downturns in dot-com services and data hosting, has been bought by Vericenter Inc. of Houston.
Vericenter will acquire St. Paul-based Agiliti's data center and most of its 65-person staff, according to company officials. Agiliti CEO Tom Kieffer will join VeriCenter's board of directors, but he and about 10 Agiliti employees team have also spun out a professional services company, called Vertiva.
Under the deal, Vericenter will issue preferred stock to privately-held Agiliti's investors, who have included the likes of Delphi Ventures of Menlo Park, Calif.; Dell Ventures of Texas-based Dell Computer Corp.; and Brightstone Capital of Minneapolis. VeriCenter will also assume Agiliti's outstanding debt. The total size of the deal was not disclosed.
Both companies began in 1999 and were very similar a few years ago, but have grown at different paces. Agiliti has revenue of about $11 million; VeriCenter's 2004 revenue was $38.4 million, up from $9.8 million in 2003.
"Agiliti is almost a mirror image of what VeriCenter was two-and-a-half years ago," said Jennifer Lozier, VeriCenter's director of marketing. "We have very similar business models and methods, the same sort of customers. Acquiring them allows us to quickly scale our business" in the Upper Midwest, she said.
Buying Agiliti continues a growth plan by VeriCenter that took a huge leap in 2002, when it acquired the hosting business of Sprint at the depths of the data-center bust. Besides Agiliti's facility, Vericenter owns six data centers in Atlanta, Boston, Denver, Dallas and Houston.
Data centers -- high-tech, high-security warehouses for computer servers -- were a hot item in the dot-com economy. The data-center gold rush cratered along with the dot-com boom, but many smaller businesses such as Agiliti were able to survive.
Indeed, the data-center business helped see Agiliti through the lean years of the tech downturn, and provided a fallback business when the company's software-leasing business didn't develop as quickly as expected.
Dave Walstad, Agiliti's vice president of sales and marketing, noted that the software-leasing market is beginning to develop at last, and that the company's technical expertise in that area will help VeriCenter compete.
In return, selling to VeriCenter gives Agiliti a nationwide network of data centers, which is appealing to customers looking to store data in many sites to help with disaster recovery.