TierPoint Raises $320 Million from Consortium of Investors
ST. LOUIS, March 24, 2020-- TierPoint, a leading provider of secure, connected data center and cloud solutions at the edge of the internet, today announced it has reached an agreement that will result in new, preferred equity investments totaling $320 million, which the company expects to be closed and funded by mid-April.
The $320 million of preferred equity is led by a consortium of new investors: Argo Infrastructure Partners, Wafra, and Macquarie Capital Principal Finance. Existing investors – including Cequel III, Ontario Teachers' Pension Plan, RedBird Capital Partners, The Stephens Group, and Thompson Street Capital Partners – will also participate.
Fawaz Al-Mubaraki, Chief Executive Officer of Wafra, commented: "Jerry Kent and the TierPoint senior management team have proven themselves as leaders in the digital infrastructure sector, and we are excited to partner with the TierPoint team to help fund the company's next phase of growth. TierPoint is well positioned for robust growth that will allow the company to expand its market leading position and capitalize on the tailwinds supporting the data center industry."
Net proceeds, after transaction fees and expenses, will be used to repay TierPoint's second lien credit facility in full, reduce the balance outstanding under the company's revolving credit facility, and provide growth capital to fuel TierPoint's continued momentum.
"This investment agreement was reached in what we all know is a very challenging environment. That's a testament to the strong performance TierPoint has already achieved and our prospects for continued growth," said the company's Chairman and CEO Jerry Kent. "Our business has tremendous momentum. In the last two years, we've increased sales bookings by 26% and the first quarter of 2020 will be another outstanding growth period. Our team of world-class technology professionals are diligently focused on providing exceptional client service, with a compelling hybrid IT strategy and comprehensive suite of market-leading infrastructure solutions that are in high demand. We're also in a unique position to help our customers navigate the current crisis. We have a very strong balance sheet, with significantly reduced leverage and improved liquidity, an infusion of growth capital, and we believe, a long runway of growth ahead of us, as we continue to invest in our services, infrastructure, and people."
Citi and DH Capital served as financial advisors to TierPoint in the transaction and Goldman Sachs advised RedBird Capital.
Meeting clients where they are on their journey to IT transformation, TierPoint (tierpoint.com) is a leading provider of secure, connected data center and cloud solutions at the edge of the internet. The company has one of the largest customer bases in the industry, with thousands of clients ranging from the public to private sectors, from small businesses to Fortune 500 enterprises. TierPoint also has one of the largest and most geographically diversified footprints in the nation, with over 40 world-class data centers in 20 markets and 8 multitenant cloud pods, connected by a coast-to-coast network. Led by a proven management team, TierPoint's highly experienced IT professionals offer a comprehensive solution portfolio of private, multitenant, managed hyperscale, and hybrid cloud, plus colocation, disaster recovery, security, and other managed IT services.
About Argo Infrastructure Partners
Argo Infrastructure Partners LP is an independent fund manager with a long-term approach to infrastructure investing. We invest in high-quality assets that provide essential services to their communities and achieve sustainable cash yields over their long operational lives. Our investments typically exhibit long-term inflation linkage, lower volatility and limited correlation to other asset classes and commodities. Argo currently manages over $2.5 billion of equity capital on behalf of our institutional investor partners.
Wafra is a global investment firm with diversified holdings constituting approximately $25 billion in assets under management across numerous business lines, with a key focus on real asset and infrastructure investments. Wafra aims to partner with best-in-class management teams across those sectors in providing flexible and accretive capital solutions, with a focus on forming long-term partnerships. Wafra's real asset and infrastructure investing strategy targets investment opportunities across the telecommunications, transportation and alternative real estate sectors. Wafra's investment strategies are supported by professionals headquartered in New York. For more information please visit www.wafra.com.
About Macquarie Capital Principal Finance
Macquarie Capital Principal Finance, the principal investment business of Macquarie Capital, provides flexible primary financing and secondary market investing solutions for corporate and commercial real estate clients across North America, Europe and Australia. Since 2009, the business has invested $34 billion across more than 580 investments. Macquarie Capital is the advisory, capital markets and principal investment arm of Macquarie Group. For further information visit www.macquarie.com/us/corporate/financing/principal-finance.
About Cequel III
Cequel III is an investment and management firm that was cofounded in 2002 by CEO Jerry Kent, a recognized entrepreneur and trailblazer in the telecommunications and technology industries. The Cequel III team has consistently created long-term value for its partners by developing experienced management teams that provide exceptional customer service and deliver outstanding operational results. In addition to its investment in and management of TierPoint, Cequel III has helped build a number of successful companies over the years, including Suddenlink, a mid-sized cable operator that was sold in 2015 to Altice Group for an enterprise value of $9.1 billion.
About Ontario Teachers'
The Ontario Teachers' Pension Plan (Ontario Teachers') is Canada's largest single-profession pension plan, with $201.4 billion in net assets at June 30, 2019. It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.7% since the plan's founding in 1990 (all figures as at Dec. 31, 2018 unless noted). Ontario Teachers' is an independent organization headquartered in Toronto. Its Asia-Pacific region office is located in Hong Kong and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded, invests and administers the pensions of the province of Ontario's 327,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.
About RedBird Capital Partners
RedBird Capital Partners is a principal investment firm which provides flexible, long-term capital to help entrepreneurs grow their businesses. RedBird seeks investment opportunities in growth-oriented private companies where its long-term capital, investor network and strategic relationships enable business owners to achieve their corporate objectives. Founded by former Goldman Sachs Partner Gerald Cardinale, RedBird has over $3.0 billion of equity under management to support its entrepreneur-led platforms, connecting patient, flexible capital with business founders to help them outperform operationally, financially and strategically. For more information, please go to www.redbirdcap.com.
About The Stephens Group
The Stephens Group, LLC, is a private investment firm that partners with talented management teams to help build valuable businesses. Backed by the resources of the Stephens family, The Stephens Group has a long history of providing sophisticated, strategic expertise and taking a partnership approach to help companies successfully achieve their strategic visions and build long-term value. With over $1.5 billion invested since 2006, The Stephens Group targets investments in industries across the U.S., including industrial and commercial products and services, specialty distribution, B2B food and consumer products, technology infrastructure and tech-enabled services, as well as select opportunistic situations.
About Thompson Street Capital Partners
Thompson Street Capital Partners is a St. Louis-based private equity firm that is focused on investing in founder-led middle market businesses. Since 2000, Thompson Street has invested in more than 100 companies in the software and technology services, healthcare services and engineered products sectors, partnering with these businesses to accelerate growth and create value for founders, management teams, and investors. Thompson Street has managed $2.7 billion in equity across its funds.
Pete Abel, 314-720-3129, Pete.Abel@tierpoint.com
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