Welsh, Carson, Anderson & Stowe has bought a majority stake of Peak 10, a Charlotte, N.C.-based data center operator and managed services provider. Peak 10’s management will also have a stake. The sellers were Seaport Capital and McCarthy Capital. Financial terms were not disclosed. The deal is expected to close in early October.
Peak 10 Inc., a managed services company with world-class data centers, and Welsh, Carson, Anderson & Stowe (“Welsh Carson”), a leading private equity firm, have entered into a transaction in which Welsh Carson and Peak 10’s executive management will acquire a majority shareholder interest in Peak 10. Selling shareholders include majority owner Seaport Capital, a New York-based private equity firm and McCarthy Capital, an Omaha, Neb.-based private equity fund.
Peak 10’s existing management team, led by Co-Founder, President and CEO David Jones will continue to operate the business. David Jones indicated, “Our partnership with Welsh Carson enables Peak 10 to continue increasing the scale of our business to meet the high demand for data center infrastructure and related managed services. Our strategic focus remains intact but our resources now position us to more rapidly extend our geographic footprint, strengthen our team and further accelerate our managed services and cloud offerings.”
Since the company’s inception in 2000, Peak 10 has managed a path of steady and consistent growth achieved through expansion in the greenfield markets of Jacksonville, Fla.; Charlotte, N.C.; Tampa, Fla. and Raleigh, N.C., and through acquisitions of established data center companies in Louisville, Ky.; Nashville, Tenn.; Richmond, Va. and, most recently, Fort Lauderdale, Fla. In 2007 and early 2008, Peak 10 opened greenfield data centers in Atlanta, Ga. and Cincinnati, Ohio respectively. Over the last two years Peak 10 has completed construction of additional facilities in five of its markets to meet customer growth and demand.
“Through its organic growth as well as strategic acquisitions and greenfield activities in entering new markets, Peak 10’s management team has continually outpaced its competition. The company’s growth has been impressive and we are excited to add Peak 10 to our portfolio of business services companies,” said John Clark, general partner at Welsh Carson.
“We are extremely proud that Welsh Carson, one of the largest and most successful private equity firms in the United States, is investing in Peak 10 and our leadership team,” said David Jones. “Since founding the company, we have remained focused on becoming an industry leader and have consistently invested significant success-based capital into our existing facilities as well as strategic acquisitions. We continuously enhance and upgrade our technology solutions for our customers. More than ever, our management team remains committed to expanding into new metropolitan markets with attractive growth prospects and deepening services that provide scalable solutions to our customers.”
“Seaport Capital has enjoyed its 10-year partnership with Peak 10,” said Scott McCormack, partner at Seaport Capital. “Working with and supporting the Peak 10 management team’s vision to grow the business from two sites into a leading data center facilities and managed services provider as a super-regional force in ten markets has been a great experience and we wish the management team and company continued success in the future.”
The transaction is expected to close in early October. Signal Hill Capital Group LLC acted as exclusive financial adviser to Peak 10 in connection with the transaction. Womble Carlyle Sandridge & Rice, PLLC is serving as legal counsel to Peak 10, and Kirkland & Ellis LLP is serving as legal counsel to Welsh, Carson, Anderson & Stowe in relation to this transaction.
About Welsh, Carson, Anderson & Stowe
Welsh, Carson, Anderson & Stowe is one of the largest and most successful private equity investment firms in the United States. Since its founding in 1979, the Firm has organized 15 limited partnerships with total capital of $20 billion. Welsh Carson focuses its investment activity in two target industries: information/business services and healthcare. Welsh Carson is currently investing an equity fund, Welsh, Carson, Anderson & Stowe XI, L.P., and a dedicated subordinated debt fund, WCAS Capital Partners IV, L.P. Additional information is available online at www.welshcarson.com.
About Seaport Capital
Seaport Capital is a private equity firm focused on making investments in communications, business and information services, and media companies. With over $500 million of private equity under management and more than fifty years of cumulative investment experience, Seaport Capital investment professionals have an outstanding record of making growth and buyout investments in private companies using comprehensive industry knowledge, experience and creativity. The key to Seaport Capital’s successful record has been and will continue to be a commitment to partnering with superior management and ensuring that their interests are aligned through ownership stakes and shared strategic vision. For more information visit www.seaportcapital.com.
About McCarthy Capital Corporation
Based in Omaha, NE with offices in Denver and Boston, McCarthy Capital is a private equity firm focused exclusively on middle market companies. McCarthy Capital manages $500 million in private equity assets and capital commitments. For more information about McCarthy Capital, please visit www.mccarthycapital.com.
About Peak 10 Inc.
Peak 10 is a managed services company with world-class data centers. It delivers scalable, economical and reliable solutions for hosting and managing complex information technology infrastructure. The company’s expert team embraces the industry’s evolving technologies by adopting and tailoring solutions such as virtualization and cloud-based services as part of its robust managed services offering. Its strong customer focus, financial stability, geographic diversity and technical strength attracts market-leading companies such as LendingTree, Global Knowledge, Pergo, Healthways and Churchill Downs. Peak 10 is SAS70 Type II compliant and helps companies meet the requirements of various regulatory compliance acts such as Sarbanes-Oxley (SOX), HIPAA, PCI and Gramm-Leach-Bliley (GLBA). For more information on data center solutions from Peak 10, visit www.peak10.com.