THS Articles

Web Hosting Provider, Aplus.Net, Acquired by Venture Capitalist Group

By Cliff Boodoosingh

Aplus.Net has been purchased by New York-based Catalyst Investors for an undisclosed sum. Gabriel Murphy, who co-founded CommuniTech.Net and later sold that company to Interland (now Web.com) in February 2002, and the venture capital group now hold stakes in San Diego-based Aplus.Net, which was founded by Ivan Vachovsky in 1995.

Murphy told TopHosts.Com, in an exclusive interview, that Ivan Vachovsky (former CEO) and his wife Lillian both still have equity positions in Aplus.Net and Mr. Vachovsky will still take an active part on the Board of Directors, which includes Murphy and three senior executives from Catalyst Investors.

“The deal closed in late July (and), we’re not disclosing details of the transaction. We were looking at half a dozen companies and still continue to have discussions with them,” explained Murphy.

Aplus.Net boasts a customer list in excess of 200,000 of which 4,000 are dedicated server clientele. In addition the Web host has more than half a million domains registered to date.

“Our intention is to grow the revenues through acquisition (and) be one of the top three Web hosting firms in the US,” noted Murphy, who included the likes of 1&1 Internet, Yahoo! and GoDaddy as among the current industry leaders. “Aplus.Net is the platform acquisition. Now we’re looking at acquisitions that complement it. There will be additional transactions by the end of this year.”

Aplus.Net is currently looking to buy companies, both in Canada and the US, with at least $20 million in Web hosting revenues. However, Murphy is also “examining a European strategy” as well.

Currently, Aplus.Net is provisioning customers at a new data center in Phoenix, Arizona. Murphy reiterated that the company is re-examining its data center footprint and has hired a national real estate firm to determine needs over the next four to six years.

“Aplus will be a much larger company (next year). There’s rapid growth, it has a very good business model… we’ll take advantage of that, caress it and (this) company will generate north of $80 million dollars in revenues by next year,” emphasized Murphy.

“The opportunity is extremely compelling and there is (room) to consolidate the market. The valuations are providing a major opportunity as the market is misunderstood by those outside of it (who are) reminded of the companies that didn’t fare well in the dotcom boom. Our strategy is exciting.”

The San Diego Business Journal recently listed Aplus.Net as one of San Diego’s fastest growing companies for the second consecutive year. It also ranks as one of the city’s 40 largest employers and one of the top 50 in revenue generation.