"Every cloud has a silver lining."
GI Partners to Acquire Peak 10 for Approximately $800-$900 Million
martinwolf Transaction Analysis
Financial Information (Approximate)
- Enterprise Value: $800 – $900 million*
- Peak 10, Inc, a national IT infrastructure and cloud provider, announced yesterday that it was being acquired by private equity firm GI Partners. The transaction is expected to close in six weeks.
- Peak 10 is currently owned by private equity firm Welsh, Carson, Anderson & Stowe, who made an initial investment in 2010 in a deal valued at more than $400 million. Welsh Carson has recouped the majority of its investment through a debt refinancing in 2012, so much of this sale will be pure profit for Welsh Carson.
- GI Partners is making the investment from GI Partners Fund IV, which has $2 billion in capital commitments and closed in April. This transaction is expected to close in six weeks.
Leveraging Cloud Momentum to Continue Growth
- Onward and Upward: Since being acquired by Welsh Carson, Peak 10 has increased its revenue by 20% and added five new data centers. With the help of GI Partners, Peak 10 is looking to continue this momentum as it both expands both its geographic reach and bolsters internal efficiency.
- The Latest in a Series: GI Partners has a history of investments in the IT infrastructure space, including Digital Realty Trust (NYSE:DLR), the Telx Group and SoftLayer Technologies (which was sold to IBM in 2013). We expect GI to pursue a consolidation strategy with Peak 10 to use M&A to build upon its already significant scale by acquiring a series of smaller managed services and cloud providers.
- On Cloud 9: Data center management companies are seeing growing demand as the cloud becomes increasingly popular within the enterprise space. Interest is especially high from sectors such as telecommunications, as established players look to grow their services offerings and boost their multiples (such as in Rogers Communications’ acquisition of Pivot Data Centres in October 2013).
martinwolf was not the advisor in this transaction.