Genstar Capital Management has sold its portfolio company ConvergeOne, a provider of communications services and managed services to enterprises globally, to Clearlake Capital. Genstar first invested in ConvergeOne in May 2007.
ConvergeOne is one of the largest providers of business communications and data services in the United States. Services include converged networks and unified communication solutions, call centers, system design, implementation, integration, maintenance, data storage and archiving and other professional services primarily for mid-sized and enterprise businesses. ConvergeOne has over 4,100 customers, including 46% of the Fortune 100 companies, operating in virtually every industry, including the financial, technology & communications, healthcare, and energy sectors. The company is headquartered near Minneapolis in Eagan, MN (www.converge-one.com).
Genstar Capital invests from $50 million to $400 million in middle-market companies that have enterprise values from $50 million to $1 billion and EBITDAs greater than $15 million. Sectors of interest include financial services, software, healthcare, and industrial technology industries. The firm was founded in 1988 and is based in San Francisco (www.gencap.com).
“We are proud and thankful of how John McKenna and the ConvergeOne management team significantly expanded the in-house maintenance & managed services business organically over the past seven years which was a key value driver for the company and our customers,” said Mark Hanson, Genstar Operating Partner. “During our ownership, ConvergeOne also successfully integrated a number of strategic acquisitions that enhanced its business performance and expanded its solutions and customer relationships.”
“As a result of our successful partnership with Genstar we were able to differentiate the company by focusing on services and solutions, strengthened by a highly knowledgeable, independent sales organization,” said John McKenna, CEO of ConvergeOne. “The global market opportunity for communications solutions has a strong growth trajectory and we look forward to partnering with Clearlake Capital to leverage new initiatives and identify strategic acquisitions.”
Clearlake invests in special situations such as corporate divestitures, recapitalizations, buyouts, restructurings, turnarounds and minority equity investments. Sectors of interest include business services; communication; consumer products and retail; defense and public safety; energy and power; healthcare; industrials; media; and technology. Clearlake currently manages approximately $1.4 billion of equity capital. The firm was founded in 2006 and is headquartered in New York (www.clearlakecapital.com).
“Genstar has developed deep domain knowledge in the technology industry and this sale further demonstrates our differentiated investment strategy and strength in execution to accelerate growth and profitability within our companies,” said Jean-Pierre Conte, Chairman and Managing Director of Genstar Capital. “The ConvergeOne management team led by John McKenna, combined with the talents of Genstar’s investment professionals and Strategic Advisory Board, generated superior value for our investors.”
William Blair & Co. served as financial advisor to ConvergeOne and Weil, Gotshal & Manges served as legal counsel.
© 2014 PEPD • Private Equity’s Leading News Magazine • 5-14-14