CHICAGO--(BUSINESS WIRE)--In a letter sent today to Internap Corporation, Discovery Group urged the Board of Directors to initiate a competitive process to sell the Company to a strategic buyer. As one of the Company’s large shareholders, Discovery Group argues that Internap is significantly undervalued in the public markets and makes an attractive acquisition target in the rapidly consolidating data center industry.
Discovery’s letter highlights the substantial gap between the valuation of Internap and the valuation of other publicly-traded data center companies. Mark Buckley, a Partner at Discovery, said, “Internap will remain undervalued due to the Company’s declining non-core business segments, lack of scale, and small-cap public company status.”
Discovery Group believes Internap’s attractive assets and service offerings – such as well-located data centers, leading data center technology, and high-performance IP services technology – would be even more valuable as part of a larger organization. “We also believe a strategic acquirer could more quickly address Internap’s low capacity utilization,” said Buckley.
“We believe Internap’s public market valuation will continue to suffer despite the Company’s valuable assets and efforts to improve financial performance,” Buckley argues. “In our opinion, a sale of the Company represents the most attractive path to achieving an outcome that is far superior to, and presents significantly less risk than, the status quo.”
Discovery Group’s letter to the Board of Directors of Internap is available on the SEC’s website www.sec.gov.
Discovery Group manages private partnerships in highly specialized investment strategies. The business was founded in 2002 and is based in Chicago. Investors in these funds include large university endowments, nationally-recognized charitable foundations and a variety of trusts, family offices and wealth advisors.