M/C Venture Partners has completed its sale of Fusepoint Inc., a provider of managed IT and colocation services to enterprises in Canada, to Savvis Inc. (Nasdaq: SVVS). The deal was valued at $124.5 million in cash.
M/C Venture Partners today announced the closing of the sale of the firm’s portfolio company, Fusepoint, Inc., a privately held managed hosting and collocation services company, to Savvis, Inc. (Nasdaq: SVVS), a cloud infrastructure and hosted IT solutions provider. The base all-cash consideration for Fusepoint’s stock was valued at the previously-announced $124.5 million, or 10.4x annualized Q1 2010 EBITDA.
“This was a very successful investment for M/C Venture Partners and demonstrates our foresight and commitment to investing in the managed hosting and collocation services industry,” said David Croll, Managing General Partner at M/C. “This transaction represents one of the more successful managed hosting and collocation services exits by a venture firm in recent years. We are extremely proud of the outcome with Fusepoint.”
M/C Venture Partners was the sole institutional investor and controlling shareholder in Fusepoint, which is headquartered in Toronto and operates three Canadian data centers. M/C Venture Partners invested approximately $30 million in Fusepoint to fund an aggressive growth strategy involving expansion of the company’s operations and the acquisition of key Canadian assets that solidified the company’s position in the market.
The company has experienced strong growth in recent years, with compounded revenue growth of 18 percent and compounded adjusted EBITDA growth of 83 percent since 2006. For the first quarter of 2010, Fusepoint generated annualized revenue of $47.4 million and adjusted EBITDA $12.0 million.
“M/C Venture Partners has been integral to our success since the beginning by helping us monetize our market opportunity, build the team and properly capitalize the company for success,” said George Kerns, who served as chief executive officer of Fusepoint. “M/C’s deep expertise in the managed hosting space and its vision of where the market was going ensured we were always on the right path that ultimately led to this successful sale to Savvis.”
Signal Hill Capital Group LLC served as exclusive financial advisor, Edwards Angell Palmer & Dodge LLP served as legal advisor and Osler, Hoskin & Harcourt LLP served as special Canadian counsel to Fusepoint.
M/C Venture Partners is a venture capital firm focused exclusively on the communications, media, and information technology sectors. The firm has invested over $1.5 billion into nearly 100 companies in those sectors. Companies M/C has backed include Attenda, Corelink, Fusepoint, ICG Communications, Legendary Pictures, Lightower, MetroPCS, NuVox, Open Mobile, Public Mobile, Seven Networks and Zayo Group. The firm has strong institutional backing from the nation’s leading pension funds and endowments as well as a long track record of success. M/C Venture Partners has offices in Boston, San Francisco and London. For more information, visit www.mcventurepartners.com.