Interliant Completes Divestiture of Non-core Assets

Like so many other ASPs, it seems as though Interliant has been struggling for survival for as long as there has been an ASP market (see Related Articles box). However, the Purchase, N.Y. managed infrastructure service and hosting provider — which in August filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code — is not going without a fight. Rather, the company continues to scramble to shed non-core business and implement its reorganization plan.

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In its latest move to position itself to emerge from bankruptcy, Interliant today announced that it has completed the sale of its Oracle professional services business to SchlumbergerSema, a subsidiary of Schlumberger .

According to a statement released by Interliant, the sale of the assets of the Dallas-based consulting group involves cash and the assumption by SchlumbergerSema of certain debt related to the Oracle business. Additionally, SchlumbergerSema has hired all of the employees of the business.

Today’s news follows several other recent announcements as Interliant makes strides to focus on its what it considers its core competency of managed hosting. In fact, Interliant reports that the sale of the Oracle professional services group completes the planned divestitures of non-core businesses announced when it filed for reorganization under Chapter 11.

“We have now completed an important part of our restructuring,” said Francis J. Alfano, Interliant’s president and CEO. “Now that we have divested our non-core businesses, we can focus all of our resources on the solution areas for which we see the greatest market demand and profit potential: our managed hosting, managed messaging, and bundled security offerings.”

Alfano assumed Interliant’s top spot in August when then-president and CEO Bruce Graham resigned along with Steve Munroe, Interliant’s chief operating officer.

In November, Sprint acquired for $5 million the assets and operations that Interliant had used to provide private-label shared and high-volume dedicated Web hosting to Sprint. Sprint also agreed to assume certain liabilities of Interliant associated with the purchased assets.

In September, Interliant sold its networking and security hardware and software business to Westborough, Mass.-based Akibia, a provider of infrastructure consulting services. That transaction included the networking and security hardware and software business managed by Interliant’s office in Woburn, Mass.

Interliant plans to continue to offer managed security services as they relate to hosted services. The company said those services include set up and installation, monitoring and management, logging and reporting, policy management, and firewall updates, as well as quarterly performance audits and policy review.

The struggling Interliant announced in October that the U.S. Bankruptcy Court for the Southern District of New York approved its agreement for Debtor-in-Possession (DIP) financing with Access Capital Inc., a New York City based lender. Under terms of that agreement Access Capital is providing Interliant with revolving credit of up to $5 million, secured by Interliant’s accounts receivable and additional assets.

Under DIP agreements, no trustee is appointed to operate the business or manage the property and the debtor is allowed to continue to operate its business while retaining possession of its assets or property.

Even though Interliant has been searching for firm financial footing for the last two years, it doesn’t it appear ready or willing to pack it in. “With these sales complete, we believe we are well-positioned to move on to our next milestone: emergence from Chapter 11,” Alfano said.

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