Summary:

Network services provider Highwinds has acquired BandCon in a deal that will grow its sales force and double its network capacity in the US. At the same time, Highwinds has hired former Panther Express CEO Steve Liddell to lead its CDN and network services group.

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Highwinds is making some big moves in the CDN market, as it has acquired network services provider BandCon for an undisclosed sum. At the same time, it has hired former Panther Express CEO Steve Liddell to run its CDN operations. With the BandCon acquisition, the CDN market continues to contract. While there were more than 50 companies providing CDN services two years ago, that number has shrunk slightly, as providers are bought out or collapse under low margins and intense competition.

Highwinds provides a mix of CDN, transit and collocation services, and says it has doubled its network capacity in the US as a result of the BandCon acquisition. As the BandCon buy helps Highwinds grow its US business, an acquisition by Highwinds gives BandCon customers access to an international network with operations in Europe and Latin America.

Customers of the combined company now have access to an international network with more than 70 points of presence worldwide and 2 Tbps of edge capacity. While BandCon didn’t have a CDN of its own — it resold CDN services from Limelight and Level 3 — the added network capacity in the US should help Highwinds with its own CDN business.

In addition to the BandCon acquisition, Highwinds hired former Panther Express CEO and Level 3 exec Steve Liddell as its new president of content delivery and network services. Liddell had been brought in to turn Panther around and flip it, selling it to CDNetworks in February 2009. But in a phone interview he said he was more comfortable in a position where he helps lead a growing organization.

And Highwinds is growing, adding 32 employees through the BandCon purchase in addition to another 20 or so that it hired ahead of the acquisition. Altogether, Highwinds has more than 150 employees now. Highwinds will keep BandCon’s office in Costa Mesa, Calif., as well as its network operations center. In addition, BandCon CEO Ari Benowitz joins Highwinds as its chief revenue officer and will report to Liddell.

In a phone interview with Highwinds CEO Steve Miller, the company is already profitable and the acquisition will be accretive. Miller says this deal was done after Highwinds had been exploring the possibility of an acquisition in the space for more than a year. That included a possible acquisition of Panther Express, which is how he got to know Liddell. But due to a volatile credit market, Highwinds couldn’t get any deals done in 2009 and instead focused on paying down and refinancing its debt. But now that a deal is complete, Liddell said Highwinds will continue investing heavily in CDN and network services.

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