90East has acquired the remaining assets of ailing Web services company Peakhour, giving the managed online services provider access to significant new venture capital from three new blue-chip venture capital companies.
As part of the agreement, 90East has acquired Peakhour's out-managed services business, ASP shuttle business, intellectual property and its hosting facilities. Peakhour staff will be moved across to the combined company.
According to Peakhour director Edwin Daniels: "The essence of the deal is three venture capital firms which were investors in Peakhour and which will now offer 90East access to venture capital funding." "The company's expansion can now be funded not only by existing investors such as Melbourne's Liberman family, but also by Technology Venture Partners (TVP), Hong Kong-based Telecom Venture Group (TVG) and the Australasian Media & Communications Fund (AMCF)," according to a company statement.
By acquiring the business operations of Peakhour, 90East aims to expand its presence in both the corporate and government sectors and expand its service offerings with additional hosting and performance-monitoring capabilities.
When asked how much the Peakhour acquisition cost the company, Daniels simply replied, "lots".
Over the last 18 months, Peakhour has undergone significant downsizing. Last year it sold off its customer and reseller base for retail services, and rolled its two Australian operations, Peakhour Australia and Peakhour Pty Ltd, into one company, at the same time cutting approximately 50 per cent of its staff.
Asked whether 90East will inherit some of Peakhour's liabilities, Daniels said, "no, going forward Peakhour is a cash-positive entity".
Daniels was unwilling to discuss why Peakhour was unable to achieve a viable business model over the last 18 months. "I have no idea," he said.