CrystalTech Hosting Bought by Financial Services Firm

Windows hosting specialist CrystalTech Web Hosting has been acquired by financial services firm Newtek Business Services. Both companies target the market for small and medium-sized businesses. CrystalTech, based in Phoenix, Ariz., hosts more than 30,000 active sites, including 25,000 running on Windows Server 2003.

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CrystalTech President and CEO Tim Uzzanti said the pressure to reach new prospects in the price-sensitive hosting industry was a major factor in seeking an acquirer. "The problem is that marketing a single product or service line to what is a largely untapped market costs money, and those costs are generally passed on to the end user in the form of higher service fees or other add-ons." The deal allows CrystalTech's hosting services to be marketed to NewTek's base of existing customers.

"Our focus will be on growing the combined customer base and actively using it to cross-sell our suite of business services," said Barry Sloane, Chairman and CEO of Newtek Business Services. "One of the primary reasons for this acquisition was the capability of CrystalTech management to compete successfully in a difficult market environment and grow the business during times when their competitors were struggling. We are not interested in altering the formula or the management that has led to the CrystalTech success, although we will look at the opportunity to brand CrystalTech as Newtek IT Services at some point in the future." Terms of the sale, which will close either this quarter or next, were not announced.