Questar division acquired by a N.Y. company

Data center: A Salt Lake facility and staff will be retained by the new owner
This is an archived article that was published on in 2005, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Questar Corp. is getting out of the data center management business.

A New York-based private investment company, Knox Lawrence International, said Thursday it has purchased Consonus Inc., a Questar subsidiary that since 2000 has housed and managed computer data centers for dozens of businesses, from small mom-and-pop retailers to giant Fortune 500 companies.

"Consonus is an excellent addition to our portfolio," said Nana Baffour, managing principal at Knox Lawrence. "We believe it is poised to experience significant growth in the years to come as the need for companies to protect their systems and data becomes even more critical."

Questar formed Consonus five years ago after it took over what was then a Portland-based provider of electronic business services and merged it with several smaller, related business that it also had acquired.

Consonus currently operates three secure Salt Lake City-area facilities that house the hardware and critical data its clients need to operate. One of those locations is inside Questar Corp.'s headquarters building in downtown Salt Lake.

Under Knox Lawrence ownership, Consonus will maintain those existing facilities and staff of approximately 20 employees. In addition, Questar Gas will remain a Consonus customer, Baffour said.

"The Consonus team has done a fine job of operating the business," Questar executive vice president Alan Allred said in a statement. "However, after receiving an unsolicited offer from KLI [Knox], we concluded that this was the right time for Questar to exit the business."

During its first few years of operations, Consonus lost money for Questar - $1.9 million in 2000 and $6.1 million in 2001, according to Questar's annual reports. In more recent years, Consonus generated a small profit for Questar.

"The venture made sense at the time but it has become more and more ancillary as we increasingly focus on our core energy business," Questar spokesman Curt Burnett said.

For Knox, though, Consonus is a perfect fit.

"Unlike many investment companies we do not operate under any time constraints. We're under no pressure to acquire a company and then three to five years later look for a buyer," Baffour said. "Our focus is more on holding companies for the long term and helping them grow."

Terms of the transaction will not be disclosed, at Knox's request. In addition, the transaction wasn't large enough to require Questar to report it to shareholders or federal regulators, Burnett said.