Globix Sells US Unit, Exits Hosting Business

Globix has exited the hosting business by selling its U.S. operations to Quality Technology Services for $20 million. In August the company sold Globix UK and its European network to Telecity Redbus for $62 million. The U.S. deal provides Quality with managed hosting customers in Santa Clara, Calif. and New York to supplement its existing operations in Atlanta, Kansas and Indiana. The sale is expected to close within the next month.

The history of Globix closely tracks broader industry trends, as it built big during the dot-com boom, commissioning 400,000 square foot data centers in New York and Boston to accommodate an expected flood of hosting customers. The company later filed for bankruptcy protection, emerging as a leaner competitor. Earlier this year, the company reviewed its operations and decided to focus on its network connectivity business.

Quality Technology Services was formed in September 2005 when the Quality Group of Companies purchased the assets of the former e^deltacom, including a 376,000 square foot data center outside Atlanta. Quality said today that it has acquired an existing 960,000 square foot data center facility in the Atlanta market, and plans to announce a New York data center site shortly.

"The addition of the Globix U.S. Hosting business is in line with our strategy and is one step towards achieving our goal to be the premier provider of managed services and data center facilities in the country," says Chad Williams, Chairman and CEO of Quality. "The New York and California areas are key pillars in that strategy."

"The agreement announced today represents a significant milestone in Globix' review of strategic alternatives," said Ted Lodge, Globix' Chairman of the Board. "In Quality, we believe we have found an excellent partner for our U.S. hosting customers and employees. The transaction also allows us to focus exclusively on our NEON network business." NEON, which is based in Massachusetts, supplies high-speed network connectivity to businesses on the East Coast of the United States.