Dart Points Acquires Metro Data Centers

"You don't typically keep a business forever. Anybody who's responsible for a company should always be thinking in terms of what an exit would look like, when it would happen, how should it happen, and what's that process going to be." That sage advice comes from Niles Overly, co-founder with Rob Kopp of Metro Data Centers (MDR), a full-service provider of interconnection and data center solutions serving the Central Ohio region. In October 2020, MDC was acquired by edge colocation provider DartPoints, with Corum acting as Overly's and Kopp's sell-side advisor.

An attractive niche company 

Overly, a lawyer, CPA, and serial entrepreneur, together with Kopp, who had an extensive background in technology, founded MDR in 2011 to serve as a regional edge interconnection and aggregation hub supporting the Central Ohio and Greater Columbus Ohio technology market. A business that offers colocation, cloud, and carrier-neutral connectivity solutions, MDR filled an interesting niche that made it particularly attractive to an edge collocation company like DartPoints. Kopp points out that MDR was unique. He notes, "Our business was more than computer data center or cloud. We brought in municipal networks where we could add fiber, internet, and connectivity to the local networks. This new model was actually municipalities like parks and recreation, and sewage and water, with fiber networks.” Kopp adds, "The municipal area where we planted this data center, a very high growth area, and the way we connected it, made us really stand out."

Overly also notes that MDR was an unusual business in that, "we were an edge data center, right next to the wire basically. That led to a lot of people being very interested in us."

What MDR had to offer and where it was located made it particularly attractive to DartPoints, whose strategy is to deliver edge colocation and carrier-neutral connectivity to underserved secondary markets.

Working with Corum

Overly followed his advice and thought about an exit strategy from the start. He recalls, "We thought about entering an M&A process early on at MDR, and then there came a time when we thought it was proper to execute." So he and Kopp contacted Corum. They were looking to enter a formal M&A process that included a world-wide search for buyers. Kopp says, "Particularly with data centers, cloud, technology, and the complexities of the business that we had, we were pretty excited about Corum and the entrance to the M&A market that they brought to us."

The two co-founders also realized that they needed help. "We were trying to execute our business plan, and at the same time we were trying to sell our company," says Kopp. "So we needed an independent banker to come in and help us sell the business and do as much as they could to help us so we could run the daily operation." And that operation runs full-time, all the time. Kopp shares that with data center and cloud, the business runs "24-7, 365 ‒ it just never ends."

Advice to entrepreneurs

Based on their experience, Overly and Kopp offer some advice to entrepreneurs considering an exit. Overly strongly advises sellers to get an investment banker like Corum. "Whatever you have to pay them, they're going to provide a lot more value than that in time and premium help for you to develop your business," he says.  Kopp seconds that advice. He notes, "Getting help, that's were Corum fits in very well because they're seasoned at it. Getting the right kind of help is really the key. It's absolutely the secret sauce to reaching a successful outcome."

Overly also stresses the importance of creating an LOI that makes sense. "I like an LOI that's pretty definitive," he states. "I don't want one that's sloppy and then we work towards a purchase agreement. I want that purchase agreement to match up well so there are no surprises. You don't want to get half way through this and in the middle of drafting a purchase agreement everything goes to heck."

And finally, Overly encourages sellers not to take an escrow. He puts it this way. “My experience is it's something you never receive. It's not necessarily that somebody is trying to take it from you. Get as much as you can up front.”