Portfolio
TelecityGroup Plc
| Sector | Technology, Media & Telecoms |
|---|---|
| Investment type | Buyouts |
| Region | UK |
| Status | Former investment |
Nature of Business
TelecityGroup is the leading provider of premium network-independent data centres in Europe. Data centres are its core business: it designs, builds and operates premium, highly connected and secure environments to house technical, web and IT infrastructure.
Headquartered in London, TelecityGroup operates 24 data centres in prime city centre positions in Amsterdam, Dublin, Frankfurt, London, Manchester, Milan, Paris and Stockholm. It has an extensive and highly-targeted programme of capacity expansion and since 2008 has opened new facilities in London, Amsterdam, Stockholm, Milan and most recently Paris. The company was founded in 1998 as a spin-out from the University of Manchester and, with a £24m investment from 3i, it was floated on the London Stock Exchange in 2001.
Investment Overview
Having originally invested in TelecityGroup, 3i knew the business well and understood that the company had great potential which it could not realise as a listed entity.
In September 2005, 3i re-acquired the business, in a 50/50 partnership with US investment firm Oak Hill, taking it private in a £58m buyout.
We identified an opportunity to consolidate in an over-supplied market, and developed a strategy to target organic growth opportunities. In December 2005, in line with our consolidation strategy, TelecityGroup acquired a key competitor, Redbus plc, and installed the Redbus management team to lead the newly enlarged group. The add-on acquisition of Globix followed shortly thereafter, with a new focus on sales force effectiveness.
The newly re-structured group was able to drive significant growth in turnover, rapidly leading to dramatically improved financial performance. This allowed the company to move once again into an investment phase, and this development opportunity was enthusiastically supported by new investors in a highly successful £436m IPO in October 2007. Subsequently, we sold our remaining shares in two tranches in 2008 and 2010, realising total proceeds since the 2007 IPO of £153m. This represented a five-fold return on the 2005 vintage investment.
Michael Tobin, CEO, TelecityGroup3i was a great partner as we moved to extend our market reach.
