Datalink Buys Local IT Firm Midwave in $17.6M Deal
Quickly growing Datalink Corporation-a Chanhassen-based company that designs, installs, and supports data centers for mid-size to large companies-on Monday announced the acquisition of Midwave Corporation.
Datalink, which has recently experienced strong sales growth, said that it acquired “substantially all of the assets and selected liabilities” of Midwave, a Minneapolis-based information technology services and solutions provider.
Datalink bought Midwave in a deal valued at $17.6 million-including a cash payment of roughly $16.1 million and $1.5 million worth of Datalink stock. Datalink expects the purchase to boost its work force to more than 400 employees and its annual sales to $400 million.
“Our expanded footprint in the Twin Cities makes us the dominant data center services and infrastructure provider in the region,” Paul Lidsky, president and CEO of Datalink, said in a statement. “This acquisition doubles our Cisco technology and services revenues, expands our managed services portfolio with the addition of a data center infrastructure monitoring service, adds an established security practice including product, services, and consulting, and doubles the size of our consulting services team.”
Datalink said it expects the deal to be accretive to its net income within one quarter. The deal has been completed, and the company plans to finish integrating the Midwave business into its own within 90 days. Midwave Chairman and CEO Jim Leslie will become Datalink's executive vice president of strategy and business development.
Lidsky told the Star Tribune that Midwave is Datalink's third acquisition since 2009, and the company has plans to make an acquisition every 12 to 18 months-with the next one likely to happen outside of the Twin Cities.
Datalink is among Minnesota's 65-largest public companies based on its 2009 revenue, which totaled $178 million. The company reported revenue of $293.7 million in 2010.