09-17-12 | Press Release

Online Tech Raises Capital to Expand Across the Midwest

Press & News

News-Press & Gazette Company has invested $20 million in Online Tech to help it expand into new markets across the Midwest. Online Tech CEO, Yan Ness, said the company found the perfect partner with News-Press & Gazette (NPG). With experience in traditional media across a number of secondary markets, NPG saw the emerging opportunity centered on the data center business, one of the fastest-growing segments of the economy today.

“Online Tech has built the leading data center operating company in Michigan. This investment provides us the capital we need to expand our data center business into additional markets across the Midwest,” said Ness.

Focus on Compliance and Secondary Markets across the Midwest

Online Tech focuses on two key areas: Mid-sized businesses in secondary data center markets and compliance-focused vertical markets.

According to Rick Kurtzbein at 451 Research, many secondary markets are underserved as opposed to the 6 top North American data center markets (that is, New York, Northern VA, Chicago, Dallas, LA & Silicon Valley/San Francisco), where most of the data center investment has gone in the past few years. To date, Online Tech services the secondary market in Michigan with over 60,000 square feet of data center space between three data centers located in Ann Arbor and Flint, with the bulk of its local business from mid-sized businesses with revenue ranging from $20M to $1B.

Online Tech has also taken a leadership position in the national market with its compliant colocation and cloud hosting solutions that primarily serve the financial, health care, health IT, retail and e-commerce markets. The company is one of the first to deliver cloud computing solutions that have been independently audited for both HIPAA and PCI compliance providing a key service for the multi-compliance market.

With the additional capital investment, Online Tech plans to expand its footprint into additional secondary markets across the Midwest and additional vertical markets that require both the high level of compliance and excellent customer service that Online Tech uniquely delivers.

NPG’s Interest in the Data Center Industry

News-Press & Gazette is a leader in print and broadcast media in a number of secondary markets across the U.S.; owning and operating 40 broadcast television stations and 14 publications. With the expansion of traditional media into the digital realm, NPG invested more than $2 million dollars building two data centers in St Joseph, Mo. at the beginning of 2012 and prompting their decision to invest in the data center industry more aggressively over the summer.

After visiting a number of data center operators across the Midwest, NPG focused those efforts on Online Tech. “Online Tech’s culture and execution framework are very similar to NPG making this a perfect opportunity for NPG,” said NPG Executive Vice President Bill Severn.

The fit with NPG was just as comfortable for Online Tech’s executive team. “We chose to partner with NPG from a number of investor groups we spoke with because of the cultural fit between the organizations,” said Mike Klein, President and COO of Online Tech. “The shared Midwest values, focus on customers and employees, and alignment around our win-win approach to business made NPG a great fit as a capital partner.”

RBC Capital Markets acted as exclusive financial advisor to NPG.

About Online Tech, LLC.

Online Tech is the leader in secure, compliant hosting, including private cloud hosting, managed cloud hosting, hybrid cloud hosting, and colocation services. Online Tech Midwest data centers deliver mission critical hosting, backed by independent HIPAA, PCI, SAS 70, SSAE 16, and SOC 2 audits required for its clients to comply with financial, government & industry regulations. For more information, visit www.onlinetech.com, call (877) 740-5028, or email [email protected] .

About News-Press & Gazette Company

The News-Press & Gazette Company, or NPG Co., is headquartered in St. Joseph, Mo., and owns and operates 40 broadcast television and four radio stations in Arizona, California, Colorado, Idaho, Kansas, Missouri, Oregon and Texas; owns and publishes 14 daily, weekly and monthly newspapers in Missouri and Kansas; as well operates two data storage facilities in Missouri. Its mission is to be the dominant provider of local news, information and advertising in the communities it serves. Family-owned in its fourth generation, NPG prides itself on strong community involvement, a commitment to sustainability and a focus on its employees’ success. For more information about NPG Co., visit www.NPGCO.com.

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