Internap Technology gets approval to sell Houston data center lease

By Caroline Salls

Pittsburgh, May 5 – Internap Technology Solutions Inc. received court approval to sell a Houston data center lease and customer contracts to 1301 Fannin Tenant LLC, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

Internap said the lease and operations associated with the Houston data center have historically been, and continue to be, underutilized and expensive to maintain, and the lease terms make it difficult for the company to implement future strategic business plans.

The company said it also operates a data center in nearby Dallas, and continuation of operations of the Houston data center does not fit within its go-forward business plan upon emergence from bankruptcy.

1301 Fannin Tenant, which is a subsidiary of Netrality Parent, LLC unit 1301 Fannin Owner, LP, has agreed to pay $31.76 million at closing, less the value of a purchase escrow amount. The escrow amount will be the product of 10 times EBITDA for the Houston colocation operations at closing, with EBITDA equal to closing annualized revenues attributable only to pending customers as closing, multiplied by an EBITDA margin of 45.93%.

Internap is an Atlanta-based provider of IT Infrastructure solutions. The company filed bankruptcy on March 16 under Chapter 11 case number 20-22393.

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