Clairvest Group Inc. has exited PEER 1 Network Enterprises Inc., selling the company to Cogeco Cable Inc. In August 2009, Clairvest invested $25.2 million in PEER 1. 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%.
Pursuant to a statement released on December 21, 2012, Clairvest Group Inc. CA:CVG +1.25% and Clairvest Equity Partners III Limited Partnership (“CEP III”, collectively “Clairvest”) announced today the sale of their common shares of PEER 1 Network Enterprises Inc. (“PEER 1”) to Cogeco Cable Inc. (“Cogeco Cable”).
In August 2009, Clairvest invested $25.2 million in PEER 1. 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 (“IRR”) of 40%. Consistent with its beneficial ownership, Clairvest Group Inc. realized 25% of this amount, or $20.3 million, compared to the September 30th carrying value of $14.7 million.
“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.”
Since Clairvest made its investment, PEER 1 embarked upon an aggressive capital investment program. Over the past two years, the company completed the construction of two flagship data centres 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 acquisition moved PEER 1 to one of the market leaders in the UK.
“We appreciate the support provided by Clairvest over the past three and a half years,” commented 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.”
“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.
Clairvest Group Inc. is a private equity management firm which invests its own capital, and that of third parties through the Clairvest Equity Partners limited partnerships, in businesses that have the potential to generate superior returns. In addition to providing financing, Clairvest contributes strategic expertise and execution ability to support the growth and development of its investee partners. Clairvest realizes value through investment returns and the eventual disposition of its investments.
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