Network service provider telx has been bought by private equity firm GI Partners, the two companies announced today. The deal gives GI Partners a major interconnection hub in 60 Hudson Street, one of Manhattan’s most wired carrier hotel buildings. Also included in the deal is 56 Marietta Street, the premier carrier hotel in the Atlanta market. Terms of the transaction were not disclosed.
telx serves as a marketplace for network services, and actively promotes business opportunities between its carrier and enterprise customers. More than 250 networks physically converge within its 60 Hudson Street facility, while 150 networks meet at 56 Marietta in Atlanta.
GI Partners operates Server Holdings, which includes dedicated hosting providers The Planet and EV1Servers, which it purchased in May. It founded and then spun off Digital Realty Trust, the leading landlord for technology properties in North America. In July GI Partners raised $1.45 billion in capital for additional acquisitions.
“telx’s business model and prior achievements are impressive, and we are very excited about their vision and prospects,” said Eric Harrison, Managing Director of GI Partners. “We believe that telx is poised to revolutionize the industry and will continue to create significant value for shareholders.”
telx General counsel J. Todd Raymond has been named President and Interim Chief Executive Officer. Founder and former CEO Rory Cutaia will serve as a consultant providing strategic advice.
“I am excited by the opportunity to lead telx into the next stages of its growth and I look forward to building on the legacy Rory and the team have created over the last few years,” said Raymond. “We are clearly at an extraordinary point in the history of our industry and telx is ideally positioned to capitalize on the changes and growth that we see accelerating over the coming years.”
“This transaction is a tremendous result for our shareholders and is the logical next step in our continued growth,” said Cutaia.
“We couldn’t be more pleased with this alliance,” said Hunter Newby, telx’s Chief Strategy Officer. “GI Partners shares our strategic vision for the telecommunications industry as well as our plans for positioning telx at the vanguard of change in the network interconnection space.”
UBS Investment Bank acted as exclusive financial advisor to telx in connection with the transaction. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. acted as legal counsel to telx, and Hill Street Capital LLC rendered a fairness opinion to telx’s Board of Directors. Latham & Watkins LLP acted as legal counsel to GI Partners.
GI Partners is a leading private equity firm with $2 billion of capital under management. The firm invests in companies with recurring revenue and asset-intensive business models in North America and Western Europe.