Highwinds CEO Steve Miller talks about BandCon buy, and his new president, Steve Liddell…Part 2

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savings and make some reductions and either raise money or get shod of it. That was very much of a short-term assignment for a company that was in difficulty.

Highwinds CDNThe way I look at Highwinds is very different. This is a company that's had a great track record, of continued growth over the past seven or eight years, particularly in the hosted IP services business, and over the past couple of years has been growing into the CDN space as really the growth engine for the company. Now, this is not a situation that needs, believe me, does not need fixing up and selling. This is a situation where we're growing and scaling a very profitable business, investing a good amount of money and resource into taking the network services business to the next level. It's a very different situation; it's a long-term proposition and a company that is doing extremely well.

FierceOnlineVideo: What kinds of revenue and profitability are we talking about?

Miller: In 2009, we were really focused on deleveraging our balance sheet and did not spend a lot of capital building out our sales force. 2010 has been very different. We went through a debt refinancing in February with Silicon Valley Bank and Comerica where we refinanced our senior creditors, giving us more flexibility to do things like M&A. In addition to investing in the organic growth, sales resources, development, engineering and operations, we were also looking at that M&A. From a revenue standpoint, on a standalone basis for 2010, we're tracking to $100 million in revenue and $33 in EBITDA (up from about $65 million in 2009). Given our pro-formas and projections through 2011, as we integrate the networks with this acquisition and look at the revenue runrate, we'll far exceed that mark in revenue in 2011.

We feel like from a financial profile perspective we're at a really strong place to step on the gas and make acquisitions, invest in organic growth, and be positioned nicely to capitalize on the growth of IP services and online video.

FierceOnlineVideo: This isn't your first acquisition. Why BandCon?

Miller: We've grown over the past several years via acquisition; we acquired four companied between 2006 and 2007. For the last couple of years we've focused on balance sheet and now we're in M&A mode again.

In the wake of that refinancing we're looking at strategic opportunities that would expand our business in the growth market of content delivery and network services and BandCon was an opportunity that we believed would give us double the network capacity in the United States and more peering; it's got 300 customers... Continued

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