Clairvest triples money in IT exit

The firm’s sale of Internet infrastructure business PEER 1 comes following a 12-month period in which Clairvest’s portfolio companies grew EBITDA by 53%.

Toronto-based Clairvest Group has sold its minority stake in IT services business PEER 1 for about C$80 million (€59 million; $80 million), generating a 3.2x return multiple and 40 percent IRR.

Vancouver-headquartered PEER 1 provides Internet infrastructure services in North America and the UK. Clairvest invested roughly C$25 million in the company in 2009, using capital from its C$300 million Fund III that closed in 2006. As with all of Clairvest’s funds, 25 percent of the capital in Fund III is committed by the general partner.

“We were particularly attracted to PEER 1 because, in late 2008 and 2009, the sector was still depressed compared to prior periods,” Clairvest principal Mitch Green told Private Equity International.

The firm also was attracted to “increasing Internet protocol traffic, the aging infrastructure in corporate data centers and the interest in having secure, high-quality Internet infrastructure assets managed by third parties,” he added.

During the holding period, PEER 1 completed two add-on acquisitions in the US and UK and built additional data centres in Toronto and the UK.

Clairvest’s exit of PEER 1 comes following a 12-month period in which the firm’s portfolio companies grew earnings before interest, taxes, depreciation and amortisation by 53 percent, according to the firm. Clairvest completed one new investment in 2012, a debt investment in US-based horse racing track New Meadowlands Racetrack.

Clairvest’s most recent fund collected C$467 million in early 2011. The firm focuses on mid-market companies in North America, in sectors including gaming, healthcare, equipment rental, oilfield services, waste management and defence, and has roughly C$1 billion of capital under management.