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InterCloud Systems Completes Acquisition of VaultLogix LLC

Shrewsbury-based InterCloud Systems, Inc. announced today that it has completed its acquisition of cloud solutions company VaultLogix, LLC. Over the past twelve months, VaultLogix generated approximately $12 million in revenue and over $4.3 million in adjusted EBITDA.

VaultLogix brings the following benefits to InterCloud:

– 98% recurring revenue stream

– 80% gross margins

– 40% adjusted-EBITDA margins

– 10,000 users to cross sell InterCloud products

– Over 600 channel partners for distribution of InterCloud Products

– Proprietary cloud backup software for InterCloud’s customer base

“We are excited to close on this accretive acquisition of VaultLogix,” said Mark Munro, CEO of InterCloud Systems. “VaultLogix will immediately strengthen InterCloud’s competitive position within the cloud services market. In addition to new products, VaultLogix also brings us direct and indirect sales teams focused in the SMB and Middle-Markets that complement our Enterprise and Service Provider business segments. VaultLogix has a recurring revenue base of cloud storage and data protection services through over 600 channel partners, which we believe will catapult our growing sales through new bundled service offerings.”

The transaction consists of $16 million in cash, $12.75 million in restricted common stock, $11.5 million of which was valued at $16.50 per share, with the balance valued at market price, and $15.5 million in three year convertible seller notes, convertible at a fixed price of $6.37 per share. The cash payment necessary for the closing was obtained using a $13.2 million secured debt facility provided by White Oak Global Advisors, LLC, as well as a $4.3 million above-market-price common stock private placement with a single strategic investor.

“It’s exciting to join the InterCloud ecosystem,” said Tim Hannibal, founder and CEO of VaultLogix. “InterCloud was our choice of companies to merge with given the complimentary portfolio of cloud services and the growth potential we bring to each other’s business. Our management and private equity owners chose InterCloud as a partner as they believe the combination of the two companies provides all with tremendous upside. We have been working diligently on our integration plans and GoTo Market strategy over the past several months and will hit the ground running.”

Aegis Capital Corp. acted as the sole placement agent for the equity investment and as an advisor to the Company in connection with the acquisition of VaultLogix.

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