Equistone in £250m cloud network deal

The investment funds a bolt-on acquisition for MDNX from LDC, with Equistone becoming the majority owner in the newly-formed group.

Equistone Partners Europe has backed MDNX Group, a network and cloud service provider in the UK, to acquire Easynet, another hosting and cloud integration network holder, from LDC.

By backing the acquisition, Equistone has taken a majority stake in the combined entity, while LDC has re-invested in the new business. Details of the transaction were undisclosed, but it is understood the combined deal value was approximately £250 million (€297 million, $410 million).

Equistone declined to comment beyond the statement.

The merger of Easynet and MDNX, which will operate under the Easynet brand name, will create the largest independent network and hosting integrator in Europe, according to an Equistone statement. MDNX was previously backed by Kelso Place Asset Management.

“Equistone is delighted to have been able to provide the funding that enables MDNX and Easynet to be merged,” Rob Myers, managing director of Equistone Partners Europe, said in the statement, adding that the combined business is “well-positioned for growth”.

Easynet’s German business is not part of the transaction, but will operate as a stand-alone business and remains backed by LDC.

Equistone backed the merger using its Equistone Fund IV, a £1.5 billion, 2011-vintage. With this latest investment, this fund is now approximately 50 percent deployed.

The deal comes after a busy year for Equistone. In September, it bought a majority stake in Whitworths, a UK supplier of dried fruit, nut and seed products, from debt provider European Capital, for £90 million. A month prior to that, it agreed the sale of its investment in Computerlinks Group to Arrow Electronics for €230 million.

It also acquired a majority stake in Karl Eugen Fischer, a leading manufacturer of cutting systems for the tyre industry in August and invested in Charles & Alice, a well-known French manufacturer of fruit desserts. In April, Equistone bought Meilleurtaux.com, mortgage solutions provider and in March, the firm acquired a majority stake in Bretèche Industrie, a supplier of manufacturing and production equipment for the agro-food industry and for the pharmaceutical and cosmetics industries.

Last month, Equistone sold Yorkshire-based bottle manufacturer Allied Glass back to its former owner, CBPE Capital, generating a return multiple of more than 2.5x.