Cloud

Private equity firm Littlejohn buys Hostway as cloud business ramps up

Private equity firm Littlejohn & Co. has bought Hostway, a 15-year-old web hosting and cloud provider, for an undisclosed sum.

Chicago-based Hostway runs data centers in Austin, Texas; Chicago; Tampa, Fla., and Vancouver, B.C. The company counts Campbell Food, Coca Cola, Fox News, McGraw Hill, and the Tribune Co. among its customers, and it claims to host more than 400,000 domains, according to its website.

In 2010 the company rolled out on-demand FlexCloud servers to provide a scalable solution that could go up against the largest public cloud, Amazon Web Services. Indeed, the company now compares tiers of its FlexiCloud servers to similar products available from Amazon and Rackspace on its website.

The FlexCloud servers are among Hostway’s fastest-growing products, Aaron Hollobaugh, Hostway’s vice president of marketing, told VentureBeat via email.

The company has been focusing on running services out of data centers in North America. Revenue fell in 2012 as the company started pulling away from data center assets outside of the continent. Centering on North America has led profits to begin to match industry-leading margins, Hollobaugh told us.

Hostway has spent money to build relationships with resellers and channel partners, and the work amounts to a “distinct advantage to reach existing and future cloud users through existing relationships the users may have,” Hollobaugh wrote. That’s one reason Littlejohn likes Hostway.

Hostway plans to release a tool to let customers manage all of the services they use from a single place. The company isn’t planning to retire any services under its new ownership, Hollobaugh wrote.

More than 400 people work for Hostway, and the deal will “undoubtedly” result in new hiring, Hollobaugh wrote. The current executive team will “remain with the company to ensure a high level of stability,” Hollobaugh wrote, although he noted that “to propel growth, new executives may be added to the team.”


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