Time Warner Cable to Buy Data Center Specialist NaviSite for $230 Million

Time Warner Cable said Feb. 1 that it plans to go into the data center operations business by buying NaviSite for $230 million.

The deal is designed to enable Time Warner Cable, the second-largest cable television operator (behind Comcast) in the United States, to diversify into data center service provisioning that will include various cloud services, such as enterprise Web services and online storage.

Time Warner Cable said it will pay $5.50 a share for the Andover, Mass., company—a 33 percent premium to NaviSite's Feb. 1 NASDAQ closing price of $4.13.

In an interesting bit of timing, NaviSite is planning to celebrate the grand opening of its newest data center Feb. 2 in San Jose, Calif.

The transaction comes on the heels of Verizon Communications' announced deal to buy Terremark Worldwide for $1.4 billion on Jan. 28.

The global cloud computing industry, which sold software, hardware and services worth an estimated $68.3 billion in 2010, could skyrocket to as much as $150 billion by 2014, researcher Gartner has projected.

New York-based Time Warner Cable was selling at slightly under $69 in New York Stock Exchange after-hours trading on Feb. 1.

The transaction is expected to close in the second quarter of 2011, Time Warner Cable said.