Partners Group to acquire Cloudflight at a value of just under €400m

Partners Group has agreed to acquire a controlling equity stake in Cloudflight, a digital transformation services provider, from Deutsche Beteiligungs AG. The transaction values Cloudflight at an enterprise value of just under €400m.

Partners Group, which is attending the Swiss Private Equity Conference, will work with management to transform Cloudflight, with key value creation initiatives including further building out the Company’s portfolio of technical capabilities and vertical expertise, expanding into new markets, intensifying strategic customer relationships, and institutionalizing the Company’s organisation and operations.

Cloudflight provides scalable solutions and tailor-made software to help companies digitize their business models, processes, and products. The Company’s core expertise is in software development for long-term projects, which typically requires deep expertise within fields such as Internet of Things, cloud architecture, machine learning, and artificial intelligence. Cloudflight has around 1,000 IT strategists, software developers, data scientists, and cloud specialists, and 19 offices across Germany, Austria, the Netherlands, Poland, and Romania. The Company is well-positioned to benefit from future growth in the digital transformation services and cloud computing markets, which is being driven by the accelerated shift to digital, rapid investment in customer-facing products, the upgrade of technology infrastructure, and increased reliance on outsourced talent.

Cloudflight has more than doubled revenues over the last three years and is set to see sustained strong growth momentum under Partners Group’s ownership.

Bilge Ogut, Partner, Head Private Equity Technology Industry Vertical, Partners Group, says: “For many industries and businesses, digital transformation remains top of the agenda for improving value propositions and overall competitiveness in a period of macroeconomic challenges. This is creating long-term tailwinds for specialist providers such as Cloudflight. The Company’s highly skilled, dynamic talent base, innovative approach, and pipeline of future add-on targets positions it well to turn these tailwinds into tangible value creation. Cloudflight has been a long-term partner to its clients and can serve them in a unique and bespoke way as technologies evolve rapidly. We will leverage our previous experience working with digital transformation services providers to help build Cloudflight for scale.”

Roger Kehl, Chief Executive Officer, Cloudflight, comments: “At Cloudflight, we differentiate ourselves through our broad technological capabilities, where we work with customers at every step of their digital journey from ideation through development to the operational phase. After a period of growth, we are now looking to continue this exciting journey and also explore further geographic possibilities beyond the DACH region and into other high-growth European markets. Partners Group’s extensive operational experience in the sector and transformational investing approach make the firm an ideal future partner.”

Joel Liebi, Member of Management, Private Equity Technology Industry Vertical, Partners Group, adds: “Based on our extensive insights into this sector and thematic approach, we have found that Cloudflight has several competitive advantages over its peers. This includes technical expertise, speed of delivery, unique culture and access to talent, and understanding of customer needs. Our value creation plan will seek to further develop these advantages, whilst also building the business and capitalizing on industry tailwinds. We look forward to partnering with the Cloudflight team and have conviction that, with our support, we will see collaborative success.”

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Data centers have become popular assets for infrastrature funds, as investors bet on companies shifting IT infrastructure to outsourced cloud service providers with data solutions.

Led by former CoreSite chief excutive Tom Ray, Denver-based EdgeCore now runs six data centers in the United States, including campuses in Phoenix, Arizona and the Silicon Valley.

Backed by over $800 million of equity from Singapore’s sovereign wealth fund GIC, Canada’s OPTrust pension fund and Mount Elbert Capital Partners, Edgecore says it has been serving large tech companies since its launch in 2018.

Founded in 1996, Partners Group manages $119 billion across private equity, real estate, infrastructure, credit and secondaries globally. The infrastructure arm that invests in EdgeCore has $21 billion in assets under management.

Source: Yahoo Finance

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