Interland Buys Trellix As Part Of SMB Push

Interland intends to pay $9.75 million in cash and stock. In return for outstanding Trellix shares, Trellix shareholders will receive $4.75 million in cash, 3 million Interland shares and a five-year option to buy up to 6 million additional Interland shares at $15 per share.

The deal is expected to close within 30 days.

Interland has 3,000 solution providers, mainly serving the SMB market. Trellix adds another 50 partners.

"This is not just a technology acquisition, but most definitely a distribution acquisition as well," said Joel Kocher, CEO of Interland. "Right now we are selling 80 percent direct. We expect this to become 50/50 between direct and indirect sales within the next 12 to 18 months, and even to flip to the majority being indirect."

Interland in August hired Tiffani Bova, vice president of sales and marketing, to head up its reseller efforts. Prior to joining the company she was in charge of channel sales at competitor Affinity Internet.

Alternate distribution efforts will be up dramatically in the next year, with several announcements around reseller programs and partnerships forthcoming, he said.

Interland's strategy moving forward is focused squarely on the SMB market, as early adopters of the hosting services reach a saturation point, Kocher said. "We are now focused on this mass market of 20 million small businesses in the U.S. that have no significant Web presence," he said. "No one has cracked the code [in this market] yet, but Trellix hands down has the best technology platform and tools around, and that's being married to a company that has capital resources and a lot of distribution channels."

Interland currently has about $147 million in cash on hand, hosts about 250,000 to 750,000 Web sites and has 220,000 customers, Kocher said.

Trellix was founded in 1995 by Dan Bricklin, the technology veteran who created VisiCalc, the first electronic spreadsheet.