Datalink CEO Plans Acquisitions to Double Sales to $1 Billion

Datalink Corp. (DTLK), a provider of data- storage and cloud-computing services, plans to use acquisitions to help double sales to $1 billion within three years, Chief Executive Officer Paul Lidsky said.

The Eden Prairie, Minnesota-based company is shopping for smaller competitors with annual sales of $60 million to $125 million to expand in the U.S. and expects to complete one deal every 12 to 18 months, Lidsky said in an interview yesterday.

With operations in 20 states and the District of Columbia, Datalink grew revenue 29 percent to $491.2 million last year as more customers sought its help using Web-based software and accessing data on remote servers. Datalink is benefiting from a surge in cloud-computing, a market that will reach $270 billion worldwide by 2020, according to Market Research Media Ltd.

“We can get to $1 billion with the right acquisitions within three years,” he said. It would take five years to hit that sales milestone through organic growth.

In October, Datalink agreed to buy Midas Medici Group Holdings Inc. (MMED)’s StraTech unit for about $20.3 million, gaining customers in the eastern U.S. Most previous deals have been around $20 million to $30 million, Lidsky said.

Datalink will probably post sales of $567.5 million this year, according to the average of analysts’ estimates compiled by Bloomberg. The average prediction for next year is $627.5 million.

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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