Horizon Data Center Solutions Acquires Dallas-based Mareechi; Combined Company Poised for Growth as Business Customers Look for Cost Savings

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The economy might be severely bruised, but one sector that continues to grow is the data center and IT services industry. Horizon Data Center Solutions has announced the acquisition of Mareechi, a firm that provides outsourced IT services to business customers both large and small. The move allows Horizon to extend its range of offerings into the hosting and application services arena, with a new division that already services more than 100 clients. Mareechi clients benefit from the strength of Horizon's top tier data center portfolio. Analysts say the potential revenue growth for the combined companies is strong, and company officials expect to dramatically grow earnings from their current $20 Million level in the coming months.

right move at the right time

In what company executives and industry analysts agree is the "right move at the right time," Horizon Data Center Solutions of Dallas has announced the acquisition of Mareechi, a fast-growing application service provider (ASP) that has provided outsourced information technology services to more than 100 clients around the world for the past nine years. Exact terms of the deal were not disclosed; however the combined businesses have an estimated 2009 revenue in excess of $20 million.

The acquisition, which folds privately-owned, Dallas-based Mareechi into the Horizon family of companies creates a global managed services company. Management anticipates keeping both companies intact, retaining all employees, and continuing Horizon's record of facility expansion and revenue growth.

The acquisition by Horizon provides Mareechi clients, including major Dallas businesses like Hunt Capital Group and Pizza Hut Park, with immediate access to Horizon's mission critical data center and business continuity services. In addition, Horizon's data center clients, which include Fortune 100 and other organizations such as Dallas-based Children's Medical Center and the Army & Air Force Exchange Service, now have the option to expand their services with Horizon into the hosting and application management areas, which may generate significant cost savings on IT overhead.

Lance A. Smith, CEO of Horizon and a long-time data center industry executive with experience working for the industry's top data center providers, says Horizon, which launched in mid-2008, had planned to build a managed services division as part of its operations, but rapid growth, expansion, and success within its core data center services, coupled with client demand, led the company to look for an acquisition candidate that would allow it to expand into the managed services area more rapidly to meet customer needs.

"Our plan has always been to build a company that was dynamic and flexible and that would meet the needs of our customer base. As our customers have begun to rely on our partnership and warm to our model of doing business, they began asking us for more services that would save them money. We had two options: build it or acquire it. We felt the most prudent strategy would be to find a company with a proven track record and existing customer base, acquire it, and provide benefits to both sides of the house. With Mareechi, we found our opportunity," Smith says.

Lance Black Lance Black, the founder and CEO of Mareechi, who will remain with the company as Executive Vice President of Operations says the joining of the two companies makes for a very good marriage.

"Our customer base is broad, and we have clients who trust us and who ask us what more we can do for them. With the strength of Horizon, we can continue to build a solid, profitable managed services company and keep our focus on being high touch. We share the same customer service philosophy as Horizon, which has allowed us to grow exponentially year-on-year. With this acquisition, we gain the strength of a parent company that can help us expand on our annual 25 percent growth rates. We anticipate doubling this new division in size and revenues within a year," says Black.

John Hendon, Vice President of Investment Bank Stifel Nicolaus and an expert on the data center and managed services sector, says the acquisition by Horizon of Mareechi is another indicator that the industry will continue to be an exciting area for investors.

"The leadership at Horizon has approached its business from a standpoint of adding value to its customers, and the managed services side offers multiple benefits. Horizon can offer more services to its customers to help solidify relationships and increase the already profitable revenue per square foot on its data centers," Hendon says.

According to Hendon, who has watched Horizon's growth over the last ten months, the business case for a new Horizon customer should be an easy sell.

"Businesses are looking for ways to cut costs and improve reliability and data security. Horizon can take costs out of a business and provide services more economically and better on a 24/7 scale," Hendon says.

Black, Smith, and Hendon all agree that from an internal business standpoint, there are definite revenue synergies for Horizon. Horizon brings to the table a top tier portfolio of audited data centers that have generated significant new business at a rate almost counter-intuitive to this economy. The acquisition of Mareechi gives Horizon a large managed services customer base that now has access to co-location and data security.

"This acquisition really makes all the sense in the world, and from a prospective customer's standpoint, it shows that these companies are on firm financial footing and are forward thinking," Hendon says.

Within the enhanced company, operations teams will be blended and staff expanded. Smith and Black say the transition should appear seamless to existing customers who will benefit from the expanded service offerings.

"Our clients expect friendly, timely response to their needs and great customer support. That won't change, and our employees now have new training opportunities and the ability to grow within the industry as they deal with the large profile clients that come from Horizon." Black says.

"We anticipate new employment opportunities within IT and facility management in the Dallas marketplace, and a continuation of our investment in direct employment on a monthly basis," Smith says.

Horizon, which already has more than 50,000 square feet of data center space within the North Dallas corridor, has plans to expand again within one of its facilities during the third quarter. Plans to add a Houston data center and one on each coast are underway, with estimated completion within the next 12 months.

Note to Editors and Reporters:
To speak with Lance A. Smith, CEO, or Lance Black, EVP of Operations, contact Connie Holubar at OutreachPR, at 903 880 8217 or email connie @ outreachpr.com. Visit http://www.horizondcs.com for more information about Horizon Data Center Solutions and to review other recent activity at the company.

John Hendon of Stifel Nicolaus is also available for additional information on the data center and managed services industry, investment in this sector, and trends. He also can be reached through OutreachPR, or via email at jhendon @ stifel.com.

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