Peak 10 to be acquired by private equity firm
05/12/2014 10:59 AM
05/12/2014 5:58 PM
Charlotte-based Peak 10 said Monday that it is being acquired by a private equity firm as the technology company seeks to enter new U.S. markets.
Under the deal, GI Partners, based in Menlo Park, Calif., will buy Peak 10 from New York-based private equity firm Welsh, Carson, Anderson & Stowe. Welsh acquired a majority ownership in the company for $410 million in 2010.
Monday’s deal, which is subject to regulatory approvals, is expected to close by the end of June. Terms were not disclosed.
Peak 10 operates data centers across the U.S. It also provides cloud computing and information technology infrastructure services, primarily to middle-market companies.
The GI Partners deal comes as the company seeks to expand into the upper Midwest and West with data centers, Peak 10 CEO David Jones told the Observer. Jones said that as the company expands, it will add jobs in Charlotte eventually, but he said he did not have a figure or time frame. The company currently employs 158 people in Charlotte.
The company’s expansion plans come as growth in cloud computing has fueled the growth of data centers, said Brooks Raiford, president and CEO of the Raleigh-based North Carolina Technology Association. Data centers have popped up in North Carolina in recent years, including Facebook’s center in Forest City, Google’s in Lenoir and Apple’s in Maiden.
Cloud computing refers to hardware and software services provided over the Internet. Companies are increasingly turning to cloud computing to help store the large volumes of data that their customers are generating, in part because it’s more efficient and sometimes cheaper than if the companies stored it themselves, Raiford said.
Peak 10 has grown substantially since Jones and co-founder Nick Kottyan launched the company in 2000 with one data center in Jacksonville, Fla.
It put its headquarters in Charlotte in 2001 and began to acquire data centers across the Southeast. Today, it has 24 data centers across the U.S. and employs approximately 400 people nationwide.
Peak 10 has four data centers in Charlotte: three at its headquarters site in southwest Charlotte and one in University Research Park. Its Charlotte data centers serve around 300 companies.
The company says it has roughly 2,500 customers. Its customers have included the PGA, Chiquita and Carowinds parent Cedar Fair Entertainment.
Peak 10 is averaging between 25 and 40 new customers a month, Jones said. He declined to disclose revenues for the company, which is privately held.
Welsh bought Peak 10 from majority owner Seaport Capital, a New York-based private equity firm, and McCarthy Capital, a private equity fund based in Obama, Neb. Welsh decided last year to sell Peak 10, Jones said.
In a statement, Eric Lee, general partner for Welsh, said Peak 10 “delivered terrific performance, and we believe is well-positioned for its next phase of growth.”
Bob Morgan, Charlotte Chamber of Commerce CEO, said data centers are a cluster that the chamber wants to see grow. While they don’t employ great numbers, they consume a lot of energy needed to keep the facilities cool, he said. That benefits utility companies that have been hurt as the state’s textile industry has declined, he said. It also benefits ratepayers when there are more customers, such as data centers, to spread out costs, he said.
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