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News Breaks
February 21, 2013
16:32 EDTINAPInternap reports Q4 adjusted EPS 4c, consensus 2c
Reports Q4 revenue $69.7M, consensus $69.01M.
News For INAP From The Last 14 Days
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April 27, 2015
09:17 EDTINAPRDG Capital recommends Internap explore potential sale or merger
RDG Capital, a significant shareholder of Internap, announced it has delivered a letter to the company's board. The letter notes that despite continuing operational improvements and recent share price appreciation, RDG believes Internap remains significantly undervalued. RDG strongly recommends the Board retain a nationally recognized investment banking advisor to explore strategic alternatives to maximize shareholder value, including a potential sale or merger. Based on discussions with leading technology sector M&A investment bankers, RDG believes there are likely a number of potential strategic buyers who would be interested in acquiring Internap at a significant premium to its recent trading valuation. Whereas comparable data center companies trade at an average 6.4x 2015E revenue and 14.3x 2015E EBITDA, RDG notes that Internap trades at just 2.6x 2015E revenue and 9.9x 2015E EBITDA, representing the lowest valuation multiples in its peer group, notwithstanding the Company having a projected EBITDA growth rate similar to its peers. Furthermore, RDG notes that recently announced data center industry M&A transactions such as Zayo Group's acquisition of Latisys Corporation at 15.3x LTM EBITDA and Telecity Group's acquisition of Interxion Holding NV at 16.4x LTM EBITDA reflect a highly favorable M&A market environment in which data center acquirers are willing to pay attractive valuation multiples. RDG believes Internap would be attractive to many potential strategic acquirers looking to extend their service offerings, expand their geographic coverage, and improve their operational efficiency through consolidation. RDG has identified in its letter numerous potential acquirers that it believes could realize significant one-time accelerated capacity utilization benefits of $100M and substantial cost savings and cross-selling synergies in excess of $60M annually.RDG estimates the private market value of Internap in a merger or sale would be $16 $19 per share.

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