Datalink Acquires Midwave for Cloud Expansion

Minneapolis-based IT data center infrastructure provider Datalink has acquired all of the assets of Midwave Corporation, also based in Minneapolis. Midwave is an IT services and solutions firm focused on optimizing the data centers and IT infrastructure for enterprises.

Datalink’s aim in making the purchase is to expand its sales and technical footprint in a key market and strengthen the combined Datalink in some key areas such as Cisco networking, consulting and managed support services, said Kent Christenson, Virtualization Practice Manager for Datalink. Cloud services also were a major factor in the acquisition, he said.

“This acquisition shows our commitment to cloud solutions,” Christenson said. “Enterprise cloud solutions provide a dramatic opportunity to transform IT and how it supports the organization. We are seeing rapid growth in private cloud computing in the enterprise and increased interest in public and hybrid solutions.”

The acquisition price was $17.6 million, comprised of a cash payment of approximately $16.1 million and $1.5 million in Datalink common stock. Datalink will also assume approximately $11.0 million of current liabilities and acquire approximately $11.5 million in current assets and $500,000 in property and equipment.

According to the company, its 2001 fiscal year will close 2011 with an anticipated annualized run rate of more than $400 million and more than 400 employees. Midwave’s consulting and managed services business, along with its technology resale business, represents an estimated $65 million in annualized revenue and a base of more than 250 customers.

“While this is a tremendous opportunity to transform IT in the organization it requires a broad approach to be effective,” Christenson said. “Cloud impacts applications, platforms, networking, security storage and how all that is deployed and managed. In order to effectively sell cloud strategies, organizations will need a broader approach, and we believe Datalink is well positioned to aid our customers in that transition.”