Press Releases
SOURCE: thewhir.com

DH Capital Closes $20M Debt Financing for SoftLayer

By Justin Lee, September 30, 2009

WEB HOST INDUSTRY REVIEW) -- Investment banking firm DH Capital (www.dhcapital.com) announced on Wednesday it has closed $20 million in financing for SoftLayer Technologies (www.softlayer.com) from an unidentified private investment group.

The announcement follows another high-profile round of debt financing DH Capital closed in July for IT services provider Cervalis, to the tune of $48 million, from a group of commercial lending institutions.

SoftLayer, which provides on-demand virtual data center and hosting services, will use the financing to fund the continued growth of the company. Company CEO Lance Crosby says the financing will help "accelerate [SoftLayer's] growth plans and further validates [its] unique approach to the hosting business".

This latest investment brings SoftLayer's total financing to over $100 million. The company says it has delivered increasing month-over-month profitability.

"We are pleased to have been able to assist SoftLayer in securing this debt financing. Despite the challenging credit market environment, the company's superior performance and business model presented a compelling opportunity for investors," says Peter Hopper, president of DH Capital.

At last month's Tier1 Hosting Transformation Summit, Hopper discussed the current financial state of the hosting market in relation to the debt market.

Hopper explains that hosting companies fair significantly better than many other industry sectors, with some companies seeing as high as a 75 percent rebound from their lowest point in the last year. Additionally, hosting sales have only seen a small decrease when compared to 2007 sales.

Though it is far from being financially sound, the debt market is slowly improving, with the hosting business being one of the more stable industries out there.

Considering this, it makes sense for DH Capital to continue providing debt financing to hosting companies like SoftLayer, as well as private investment groups to invest in hosting providers.