Peer 1 Buys ServerBeach for $7.5 Million

Peer 1 Network Enterprise said yesterday that it will purchase discount dedicated server company ServerBeach for $7.5 million. The deal provides customers and cash flow for Peer 1, a Canadian provider of bandwidth and colocation services.

ServerBeach was launched in January 2003 by Rackspace co-founder Richard Yoo. Offering dedicated servers for $99 a month, the company grew to 32,224 active sites and 54,604 hostnames. The purchase price includes ServerBeach's customers and a data center in San Antonio, Texas.

The ServerBeach business will be operated as a wholly owned subsidiary of Peer 1, with the staff and management of ServerBeach becoming Peer 1 employees. "We are very pleased to be able to integrate ServerBeach’s proven team of very experienced and capable people who have rapidly built a major player in this fast growing sector," said Rick Hingson, Peer 1’s Vice President of Operations. "The dedicated server business is a natural extension of the infrastructure that Peer 1 already provides and we see many opportunities to leverage existing customer relations within both companies."

"The fit between the ServerBeach and Peer 1 product families is outstanding," said Yoo. "With Peer 1’s and ServerBeach’s corporate cultures being so closely aligned, the combination will be a win for the ServerBeach team and their customers. Peer 1 is acquiring a great company that will contribute to producing a strong market force in the dedicated server, co-location and bandwidth markets."

The deal continues an expansion for Peer 1, which last month added points of presence (POPs ) in two of the nation's most wired carrier hotels, 60 Hudson in New York and One Wilshire in Los Angeles.