TA Associates has completed its buyout of CoSentry, a data center, cloud computing, and managed service provider. Sellers were McCarthy Capital andWaittCorp Investments, the investment company of Gateway Computer co-founder Norm Waitt. Terms were not released.
McCarthy Capital and Waitt recently announced that CoSentry.net LLC, has been acquired by private equity firm TA Associates. CoSentry is a data center, cloud computing, and managed service provider. CoSentry’s technology solutions include secure data centers, disaster-recovery services, and managed IT services from its facilities in Kansas City, Sioux Falls and Omaha.
CoSentry was founded in 2000 through a partnership with management and Waitt. In 2006, Waitt recruited Mike Steffan to lead it. Shortly thereafter, Joe Urzendowski joined the management team as Chief Administrative Officer. McCarthy Capital subsequently made an investment in CoSentry in 2008.
Since 2008, CoSentry expanded its three existing data centers, built a new $25 million Tier IV data center in the Omaha market, added a number of managed services, and more than quadrupled its earnings before interest, tax, depreciation, and amortization (EBITDA).
“McCarthy Capital has enjoyed its partnership with CoSentry,” said Patrick Duffy, Partner at McCarthy Capital and CoSentry Board Member. “It has been a great and meaningful experience for us to support and enhance management’s vision to grow the business from a local operation into a nationally recognized company. We wish the management team and company continued success.”
This is McCarthy Capital’s second successful realization from an investment in the data center and managed services industry. In 2010, McCarthy exited an investment in Peak 10, Inc., a Charlotte-based operator of data center facilities in 10 markets.
“It’s been a pleasure working with such a terrific group of people. I’m proud of what this partnership has been able to accomplish over the past 12 years and grateful for the contributions of many along the way,” said John Schuele, President of Waitt and CoSentry Board Member. “This is a tremendous achievement for a local company as numerous jobs were created here and many of the employees were owners.”
“CoSentry management is very grateful for the partnership approach of McCarthy and Waitt,” said Mike Steffan, CEO of CoSentry. “They provided equity capital when we needed it and more importantly they added tremendous value through their expertise, resources and relationships.”
The current management team will continue to operate CoSentry and has retained a material ownership interest in the company.
Signal Hill Capital Group LLC initiated this transaction and provided financial advisory services to CoSentry. Koley Jessen P.C., LLO served as legal counsel to CoSentry.
About McCarthy Capital
McCarthy Capital is an Omaha-based private equity firm focused exclusively on lower middle market companies. For more than 25 years, the McCarthy organization has been partnering with founders, families, and exceptional management teams to support the growth of their companies as a minority or majority partner. The Firm manages approximately $500 million of investment capital and typically invests $10 to $50 million of equity in a mix of growth equity investments, recapitalizations, and management buyouts across a wide range of industries. More information about McCarthy Capital can be found at www.mccarthycapital.com.
Waitt is the investment company of Norm Waitt, co-founder of Gateway Computers. The company has investments in real estate, energy, public securities, and in private companies such as: NRG Media, McCarthy Group, Gold Circle Films, and Waitt Outdoor. More information about Waitt is available at www.waittcorp.com.
CoSentry serves as a one-source provider of data center, cloud computing and managed technical services. For over 10 years, CoSentry has been helping clients create and protect technology platforms to compete in today’s always-on business environment. Market leaders benefit from CoSentry’s world-class services to keep their businesses running – no matter what. The company also provides diverse and robust colocation and managed Internet services. CoSentry has facilities in Kansas City, MO; Sioux Falls, SD; Papillion, NE; and Omaha, NE. For more information, please visit www.CoSentry.com.
About TA Associates
Founded in 1968, TA Associates is one of the largest and most experienced middle-market growth private equity firms. The firm has invested in over 400 companies globally and has raised more than $16 billion in capital. With offices in Boston, Menlo Park, London, Mumbai and Hong Kong, TA Associates leads buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries.