The Clairvest Group has sold its fund 3 portfolio company PEER 1 Network Enterprises to Cogeco Cable. Under terms of the sale, Clairvest received sale proceeds of $79.5 million which took Clairvest’s total proceeds over the investment’s life to $81 million, which equates to 3.2 times invested capital and an internal rate of return of 40%. Clairvest invested $25.2 million in PEER 1 in August 2009.
“When we were looking to invest in the IT infrastructure industry, PEER 1 was by far our first choice based on its financial metrics, scale, profitability and management,” said Ken Rotman, Co-CEO of Clairvest. “The financial return achieved on this investment is a tribute to the company’s management team who has done an outstanding job at strategically growing PEER 1 to become one of the leading companies in its market.”
PEER 1 is a global online IT infrastructure provider that offers managed hosting, dedicated hosting, and co-location services. The company is based in Vancouver (www.peer1.com).
Upon its acquisition by Clairvest in 2009, PEER 1 began an aggressive capital investment program. Over the past two years, the company completed the construction of two data centers in Toronto and the UK. Significant investment in human capital and physical infrastructure in the UK improved PEER 1’s market position and enabled it to purchase a UK competitor in July 2012. This add-on acquisition made PEER 1 a market leader in the UK.
“We appreciate the support provided by Clairvest over the past three and a half years,” said Fabio Banducci, CEO of PEER 1. “The addition of Clairvest to our shareholder base and board of directors was an important part of the overall upgrade to our organization.”
The Clairvest Group invests in mid-market companies, principally in North America, across a range of industries. Clairvest looks to invest from $15 million to $50 million in equity capital in companies with EBITDAs from $5 million to $40 million. Desired ownership percentages range from 20% to 80%. The firm is based in Toronto, ON (www.clairvest.com).
“PEER 1 is a great example of an internet infrastructure provider that continues to innovate and move upmarket, thereby reaping the benefits of a high quality customer base,” said Mitch Green, Principal and IT Services domain lead for Clairvest “PEER 1’s management does a terrific job of investing resources into projects that enhance the service offering and produce sound economic results, which make it an attractive strategic acquisition for Cogeco Cable. We wish this outstanding group continued success in the years to come,” added Mr. Green.
© 2013 PEPD • Private Equity’s Leading News Magazine • 1-30-13
