ABRY Partners and Berkshire Partners have acquired the Telx Group. Financial terms weren’t announced. GI Partners was the seller. New York-based Telx is an interconnection and colocation data center operator. Telx had filed for a $100 million IPO in March 2010. Evercore Partners provided financial advice to Telx.
GI Partners (“GI”), a leading mid-market private investment firm, announced today the sale of its portfolio company, The Telx Group, Inc. (“Telx”), one of the fastest growing providers of global interconnection and colocation facilities, to ABRY Partners and Berkshire Partners LLC, two Boston-based investment firms. Terms of the transaction were not disclosed.
Telx facilities serve over 900 customers with approximately 34,000 interconnections, and customers can connect with hundreds of communication service providers, enterprises and cloud providers in Telx facilities. The company was acquired by GI Partners in 2006 and, under the investment firm’s nearly five-year stewardship, Telx achieved considerable organic growth in its existing markets and also dramatically improved its competitive position as a result of key add-on acquisitions. The company has since developed a national footprint of 15 locations starting from two facilities at the time of acquisition. GI Partners also significantly expanded the management team with the appointment of industry veteran Eric Shepcaro as CEO, in addition to several other senior positions. As a result of these and other initiatives, Telx achieved dramatic sales and EBITDA gains, including topline growth of over 40% throughout the hold period despite the recession, landing on the Inc. 5000 list two consecutive years in a row and earning a nod from Red Herring as a Top 100 North American Company.
Howard Park, a Managing Director of GI Partners, said, “We are pleased with the performance of Telx under our ownership and the gains we and the management team have achieved. We believe that under the ownership of Berkshire and ABRY, both of whom have experience investing in this sector, the company will continue to grow within its existing facilities and selectively identify domestic and international expansion opportunities.”
Eric Shepcaro, Chief Executive Officer of Telx, said, “Telx delivers best-in-class interconnection and colocation services and has achieved consistent growth and profitability since its acquisition by GI Partners. We have been extremely pleased with our GI partnership, which has provided valuable insights, resources and intensive operational engagement as we expanded our business and identified select add-on acquisitions. Joining forces with Berkshire and ABRY allows us with continued opportunity to work closely with our partners to deliver interconnection product and data center services to meet the increased volumes of data and voice traffic. For our customers there will be no changes and they will receive the same excellent service they have come to expect.”
“Eric and the Telx management team have done an excellent job creating premier facilities for interconnection,” said Larry Hamelsky, Managing Director of Berkshire Partners. “We look forward to partnering with them as they continue to build on this platform to service their clients’ increasing demand for network centric applications.”
Evercore Partners served as financial advisor to Telx on the transaction and Paul Hastings LLP served as legal advisor.
About The Telx Group, Inc.
Telx operates network-neutral interconnection facilities and is a leading strategic partner for global interconnectivity and data center solutions. With 15 strategically located interconnection and colocation facilities across the U.S., Telx provides cost-effective, reliable and secure access to an ecosystem of over 900 telecommunications carriers, ISPs, content providers, technology companies and leading global enterprises. With over 34,000+ direct connections, Telx is able to provide lower costs, near zero latency and fewer points of failure, allowing organizations to improve network performance, reduce time to market and tap into new business opportunities to build a competitive advantage. For more information, please visit www.telx.com.
About GI Partners
Established in 2001 and with 54 investment professionals, GI Partners is a leading private investment firm that focuses on control-oriented investments in asset-intensive businesses and portfolios of assets located in North America and Western Europe. The firm is active in a number of key sectors, including IT infrastructure, specialist healthcare, financial services, leisure, retail, logistics and media. In addition to Telx, other IT-focused companies in the GI Partners’ portfolio include SoftLayer Technologies, the market leader in dedicated, managed, and cloud hosting; and ViaWest, a leading provider of data center space based in Denver. With the sale of Telx, GI Partners further solidifies its successful track record of investing in IT infrastructure over the past decade. Since inception, the firm has secured $3.9 billion of equity capital commitments from recognized institutional private equity and real estate investors in the U.S., Europe, Asia and the Middle East. In addition, GI manages the $3.4 billion CalEast Global Logistics business through a separate account with CalPERS. The team is currently investing from GI Partners Fund III L.P., which is over 70% committed. For more information, please visit www.gipartners.com.
About ABRY Partners
Founded in 1989, ABRY is one of the most experienced and successful media, communications, and business information services sector-focused private equity investment firms in North America. ABRY has completed over $27 billion of transactions, representing investments in more than 450 properties. The firm is currently managing over $3.5 billion of total capital and investing out of a $1.6 billion private equity fund, $750 million senior equity/mezzanine fund and a $1.2 billion senior debt fund. ABRY has extensive data center investing experience, having completed over $1.5 billion of transactions and investments in data center companies such as CyrusOne, Datapipe, Hosted Solutions, Q9 Networks and Sentrum. More information is available at www.abry.com.
About Berkshire Partners LLC
Berkshire Partners, the Boston-based private equity firm, has invested in over 100 leading middle market companies for over twenty-five years through eight investment funds with aggregate capital of $11 billion. Berkshire has developed specific industry experience in several areas including consumer products and retail, business services, industrial manufacturing, transportation and communications. Representative investments include Amscan/Party City, Bare Escentuals, Carter’s, Crown Castle International, NEW Asurion and TransDigm. The firm seeks to invest $50 million to $500 million of equity capital in each portfolio company. For additional information, visit www.berkshirepartners.com.