Knology, Inc. has acquired E Solutions Corporation for $13.8 million in cash. E Solutions is a  provider of colocation and data center services, operating two state-of-the-art SAS 70 Type II certified data centers in Tampa, Fla.

From a financial perspective, the transaction is immediately accretive to Knology on a levered free cash flow per share basis. Knology will be able to fully amortize the purchase price, resulting in tax benefits with an estimated net present value of $2.8 million. Including the tax benefits, the transaction is accretive on an EBITDA multiple valuation. Knology funded the acquisition with cash on hand.

"The addition of E Solutions will enhance Knology's already strong commercial product offering and allow us to better serve our business customers," said Todd Holt, President of Knology. "This transaction demonstrates our ongoing disciplined approach toward merger and acquisition opportunities given the economic aspects, as well as the quality of the people and assets involved. Knology will be able to leverage its existing customer base, salesforce and certain real estate to complement a datacenter business that already has a healthy growth profile. We welcome the E Solutions team to Knology and are excited about our future together."

"E Solutions has been delivering superior products to its customers for over a decade and has a proven track record of growing revenue and generating free cash flow," said Rick Nicholas, Jr., Chief Operating Officer of E Solutions. "The E Solutions group is excited about joining Knology and believes that this positive transaction positions the overall business to better serve our existing customers, as well as customers across the entire Knology footprint."

Stephens Inc. served as financial advisor to Knology and RBC Capital Markets, LLC acted as financial advisor to E Solutions in this transaction.