Oak Hill Capital Partners to Acquire Intermedia, Global Leader in Cloud Services
Phil Koen, former CEO of Savvis, to join Intermedia as Chairman and CEO
New York – May 26, 2011 – Oak Hill Capital Partners, a leading private equity firm, has entered into a definitive agreement to acquire Intermedia.net, Inc. (“Intermedia” or the “Company”), a global leader in cloud services founded by technology entrepreneur Michael Choupak. In conjunction with the transaction, Oak Hill Capital also announced that Phil Koen, former CEO of Savvis, Inc., will join Intermedia as Chairman and Chief Executive Officer. The terms of the transaction were not disclosed.
Since its founding in 1995, Intermedia has been a pioneer in offering secure and reliable cloud-based business-class email, and today is the largest third-party provider of these services to small and mid-sized businesses in the U.S. The company has continued to innovate and expand its cloud service offerings, growing its user base at an annual compounded rate of 31% over the last four years. As of April 30, 2011, the company manages an industry-leading 320,000 premium Microsoft hosted Exchange mailboxes. It distributes its suite of services to 38,000 business customers directly and through its 6,800 global channel partners.
“We are proud to have built this company from a startup to a profitable, major player in the IT hosting industry, with no outside investments. We are now the leading independent provider in a rapidly growing market,” said Mr. Choupak, the founder and majority shareholder of Intermedia. “It is very exciting to see Intermedia take this important step to the next level as it aligns itself with great partners to drive further growth.”
Intermedia will continue investing heavily in high-quality 24×7 support, complimentary migration to the cloud, innovative and easy-to-use technology, and always-on operations. The company offers customers a full-service experience that has driven its growth and distinguished it from “do-it-yourself” competitors. Intermedia also plans to further expand its breadth of cloud-based services through new product introductions and acquisitions. Intermedia’s proprietary HostPilot® Control Panel is the cloud-based management platform of choice for small and mid-sized businesses, and the channel partners that serve them, looking to access a full suite of cloud-based products such as Microsoft’s Exchange, Office Communications Server, and SharePoint, as well as other Intermedia services such as hosted PBX, archiving, security, backup, mobility options, and more.
“Intermedia has a phenomenal record of execution and industry leadership, and I am delighted to join in leading the company forward,” said Mr. Koen. “As a pioneer and now significant player in cloud-based IT services, Intermedia has tremendous potential for further growth by delivering more cost-effective solutions to companies whose on-premise IT is moving to the cloud. We intend to build Intermedia into a leading provider of a broad suite of cloud services to SMBs and the channels that serve them, with Microsoft Exchange email as the core service.”
Mr. Koen has significant leadership experience in the datacenter industry and is a pioneer in its transition to cloud services. Previously, he was CEO of Savvis (NASDAQ: SVVS), a leader in managed hosting, cloud computing, colocation, network connectivity, and IT consulting, from 2006 to 2010. Prior to that, he served as President and COO of Equinix (NASDAQ: EQIX), a provider of network-neutral datacenters and Internet exchange services, from 2002 to 2006. He currently serves on the Board of Directors for Infinera Corp (NASDAQ: INFN), ViaWest, Proofpoint and Vette Corp.
Robert Morse, a Partner at Oak Hill Capital, said, “We are still in the early stages of a dramatic shift in IT from the corporate premise to the cloud, and Intermedia is in an ideal position to accelerate this shift. We look forward to working with Phil Koen and the rest of the management team to drive Intermedia’s next stage of growth. ”
“Oak Hill Capital and Phil Koen are the perfect partners to help Intermedia realize its full potential, given the combination of their strong capital base, deep industry knowledge, and history of successfully growing companies like ours,” said Serguei Sofinski, outgoing Intermedia CEO and shareholder. “Intermedia is well-positioned to be the premier provider of cloud services given the full-service experience we have developed for our customers – and the proprietary cloud infrastructure and tools we use to deliver it.”
The transaction is expected to close during the second quarter of 2011. Stifel Nicolaus Wiesel is acting as exclusive financial advisor to Intermedia, and Feinberg Law Group, LLC is serving as legal counsel. Wilson Sonsini Goodrich & Rosati is serving as legal counsel to Oak Hill Capital. Sullivan & Cromwell LLP is serving as legal counsel to Michael Choupak, Intermedia’s largest shareholder.
Intermedia is the premier provider of cloud services to small and mid-sized businesses. Delivered from Intermedia’s secure datacenters, these services include hosted Microsoft Exchange email, VoIP telephony, instant messaging, file management, security, backup, support for the full range of smartphones and tablets, and more. The company’s proprietary cloud infrastructure assures high reliability, and a certified support team is available around the clock. Intermedia also empowers thousands of partners – including managed service providers and select Fortune 500 companies – to sell cloud services under their own brand. Founded in 1995, Intermedia was the first company to offer business-class cloud email and now has 320,000 premium hosted Exchange mailboxes under management, more than any other provider. Visit www.intermedia.net for more information.
About Oak Hill Capital Partners
Oak Hill Capital Partners is a private equity firm with more than $8.0 billion of committed capital from leading entrepreneurs, endowments, foundations, corporations, pension funds and global financial institutions. Robert M. Bass is the lead investor. Over a period of more than 24 years, the professionals at Oak Hill Capital Partners and its predecessors have invested in more than 60 significant private equity transactions. Oak Hill Capital Partners is one of several Oak Hill partnerships, each of which has a dedicated and independent management team. For more information about Oak Hill Capital Partners, please visit www.oakhillcapital.com.