Emil Sayegh

Jun 2, 2015

Codero Hosting Secures New Investment to Fuel Next Phase of Transformative Growth

I am thrilled to announce that BLM Acquisition Corp., a consortium of 32 regional telecom and broadband providers, has acquired Codero. This ushers in a very exciting era for the Codero team, Codero customers, and the new Codero investors. This is a very unique transaction in the hosting space and an instantly transformative acquisition for us and for our customers.


This deal is not the typical capital investment commonly executed by companies as a means to grow. It is not a larger competitor acquiring a smaller competitor like we see too frequently in the hosting space (i.e DataPipe acquiring GoGrid, etc.). It is not a financial sponsor, such as private equity firm, acquiring a hosting company (as we saw recently with Liquid Web). This is a unique deal that will preserve Codero as an independent company while giving it the muscle and geographical reach to continue serving customers and continue its rapid growth. While capital has always been a vital component of Codero’s aggressive growth plan, the strategic alignment of this acquisition brings a lot more value to the table for Codero, BLM and, most importantly, our existing and future customers.

What Sets This Deal Apart?

Codero’s new investors include some of the country’s largest and most respected rural and independent communications providers. BLM Acquisition Corp. was strategically formed for the sole purpose of acquiring Codero. The BLM group of 32 Telecom companies provides telecom, broadband, and IT services to suburban and rural populations throughout the United States, serving millions of residential and business customers and covering much of the United States.

Data Center Map

The BLM consortium serves markets that are the under-served frontier of the internet services space. This consortium is about to see a huge influx of data due to the Internet of Things (IoT). We purposefully pursued this partnership not only as a source of capital, but truly as a strategic partnership designed to immediately increase Codero’s market reach and infrastructure footprint.

A Transformative Acquisition

  • Channel Growth: A large part of Codero’s planned growth is to expand our channel program into a world-class organization. While we have a successful channel program in place, we need a broader footprint of committed channel partners. This partnership with BLM makes each investor company a “vested” partner company reselling Codero’s business hosting solutions to their customers. With this acquisition, Codero essentially adds 32 new partners, significantly expanding the Codero sales channel while adding powerful business hosting solutions to the BLM partner product lines.
  • Customer Intimacy: Codero gains a network of strategic investors with “boots on the ground” knowledge of the communications and technology needs of their customers. This critical knowledge enables Codero in the development of customized hosting and cloud solutions tailored to the unique needs of edge, regional, and underserved markets.
  • Geographical Footprint: Through a network of planned “edge” data centers, located at the facilities of the telecom and broadband investors, Codero customers will have enhanced connectivity plus expanded location and redundancy options. New physical operational hubs means the delivery of latency and bandwidth sensitive applications will be greatly enhanced.
  • Fiber Networks: Utilizing the existing fiber network in 32 markets puts Codero in a position to offer fast data delivery at a more affordable rate for the customer.
  • Expertise: BLM investors get access to Codero’s talented team of IT professionals, enhancing their ability to address the growing IT needs of their customers.
  • Captive Market: The markets BLM represents are hungry for business class hosting, such as what Codero provides. With the BLM group’s proven reputation for exceptional service and on-the-ground knowledge, adding Codero’s high-performance hosting services — backed by a team of seasoned hosting experts — will meet the immediate demand for business hosting in these markets.
  • Values Alignment: The most refreshing aspect of this acquisition is the fact every BLM partner company places ‘service’ at the very top of their corporate core values. Codero’s service-driven team, along with our world-class professional hosting, will be a natural extension of the partner company product lines.
  • Big Data Game Changer: With new edge network data centers in multiple areas spanning North America, Codero will lead the big data and Internet of Things revolution. By bridging the latency gap between data storage, users, and businesses delivering data-driven solutions, Codero will deliver highly optimized big data performance.
  • Product Development: With the capital investment by BLM, Codero will be able to go to market faster with new services and expanded capabilities. This means more options for current clients and more opportunities to capture new market share. While other acquisitions suffer from long integration efforts, this acquisition simply increases Codero’s product development velocity. Our product development team will continue being solely focused on bringing new products to the market.

A Word from Our Investors

In a joint statement, Bill King, Leo Staurulakis, and Manny Staurulakis, the founding shareholders of BLM and architects of the Codero acquisition, outlined the drive and vision behind the Codero transaction:

“Robust, high-speed, technically advanced networks and access to cutting-edge IT services are critical to maintaining employment, supporting economic development, and sustaining the vitality of rural and small markets. The telecom and broadband providers that serve smaller markets must continually invest in new technologies and capabilities to address the rapidly changing needs of their customers. The Codero transaction is about marrying the impressive technical, product development and sales resources of Codero with the collective resources and established market presence of the investor telecoms, creating a scalable vehicle for the development and delivery of customized hosting and IT products and services.”

I am looking forward to working with Bill, Leo, Manny, and our other board directors (who will be announced soon).

A Sincere Thank You

Catalyst Investors, our prior investors, had the vision and foresight to invest in Aplus.net in 2006 and helped the company transition into Codero Hosting in 2009. Catalyst has been a tremendous partner throughout my tenure at Codero. The company recognized that it was time for a different type of investing partner for Codero — one that can quickly expand the company’s footprint with various assets in addition to capital. We are grateful for Catalyst’s long-term partnership and commitment to the company, its employees, and customers. It has been a joy working with the entire Catalyst Investors team and our fabulous board of directors. Their advice and help have been invaluable to me and to the company.

A New Beginning

We are very proud and excited where Codero is today, and we are even more excited what this new partnership will bring in this next phase of growth! The combination of our On-Demand Hybrid Cloud and dedicated products, along with the vast footprint our investors bring, puts us at the nexus of all technology trends. We will be creating new opportunities for jobs, better businesses, and better lives for new customers in these underserved regions. Our existing customers will also have access to new markets via the vast fiber network and footprint our investors own, which Codero will leverage. We will also be creating fresh growth opportunities for our employees. While the last three years at Codero have been exciting and rewarding for me, I am very much looking forward to what this next era will surely bring to our customers, partners, and employees.

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