INAP’s $132 Million Acquisition of SingleHop


RBC Capital Markets acted as lead financial advisor and Jefferies LLC acted as financial advisor to INAP. Jenner & Block LLP served as INAP’s legal advisor. On the sell-side, DH Capital acted as the sole financial advisor to SingleHop. Goodwin Procter LLP and Hinshaw & Culbertson LLP acted as joint legal advisors to SingleHop.

Internap Corporation (NASDAQ:INAP), a provider of high-performance internet infrastructure including colocation, managed services and hosting, cloud and high-performance network services, has entered into a definitive agreement to acquire SingleHop, LLC, a private company headquartered in Chicago, Illinois for $132 million in cash.

SingleHop is a recognized leader in the managed hosting and infrastructure as a service (IaaS) business segment, offering highly automated and on-demand IT infrastructure. This strategic combination allows INAP to immediately offer its customers advanced products and expertise. SingleHop’s enterprise and business customers will also benefit from INAP’s North American and global presence, providing a significantly more expansive integrated footprint.

NAP will be acquiring SingleHop in an all cash deal for $132 million reflecting a purchase multiple of approximately 7x after synergies, based on annualized Adjusted EBITDA of approximately $16 million for 3Q 2017 and expected annualized cost synergies of $2 to $3 million. INAP expects SingleHop will contribute $45 to $50 million in annualized revenue post-closing. In INAP’s fourth quarter 2017 earnings release, INAP will provide combined proforma guidance, assuming a first quarter closing of the transaction. Adjusted EBITDA is a non-GAAP financial measure, which we define in the attachment to this press release entitled “Non-GAAP (Adjusted) Financial Measure.” A reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure can also be found in the attachment.

INAP has entered into a commitment agreement with Jefferies Finance LLC to provide a fully underwritten debt financing which, combined with INAP’s cash on hand, will fund the entire transaction. Ultimately, INAP will look to optimize its capital structure with a blend of equity and debt securities to affect a leverage-neutral or better outcome. The transaction is expected to close before the end of the first quarter 2018, subject to customary closing conditions, including the expiration or termination of any applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

The Goodwin cross disciplinary team was led by partner John Mutkoski (Picture) and included partners Janet Andolina and Nicholas Palumbo; counsel Todd Hahn; and associates John Corrigan, Hilary Levin, Alex Plaum and Nikolaus Caro.

Involved fees earner: John Mutkoski – Goodwin Procter; John Corrigan – Goodwin Procter; Hilary Levin – Goodwin Procter; Janet Andolina – Goodwin Procter; Alexander Plaum – Goodwin Procter; Nicholas Palumbo – Goodwin Procter; Nikolaus Caro – Goodwin Procter; Todd Hahn – Goodwin Procter;

Law Firms: Goodwin Procter;

Clients: SingleHop, LLC;

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Author: Ambrogio Visconti