Milestone continues rebound with fourth exit this year(4)

Milestone Capital Partners looks to have completed the latest in a string of successful exits after agreeing to sell its stake in data room business IX Europe – just weeks after selling port terminal operation Nordic Limited to Forth Ports for a four times return.

UK buyout firm Milestone Capital Partners has agreed its fourth exit this year with the likely sale of IX Europe, a business that provides datacentre services in a number of European cities, as it looks to put the problems of last year behind it.

The firm has now completed four exits this year, allowing it to return €315 million to investors in the last six months. The successes are in stark contrast to its travails last year, when it lost three partners – including one of its co-founders – to cut costs as it looked to quell investor unrest.

Milestone is selling its shares in IX Europe to US trade buyer Equinix at 140 pence per share, valuing its stake – which stands at just over 30 percent – at €117 million. This would represent a return of about 2.8 times for Milestone, which was a founding investor in IX Europe in July 1999 and has since ploughed more than €40 million into the business.

Equinix raised its offer to fend off a rival offer from an unnamed third party. Milestone managing partner Erick Rinner said the revised bid had met with an enthusiastic response from analysts and investors. “They’re all very pleased with the increased offer,” he told PEO. Equinix now controls about 69 percent of IX Europe’s shares, and will take full control assuming it hits the 75 percent threshold by the time of the company’s AGM.

The sale of IX Europe comes just weeks after the company sold Nordic, a UK waste management and port terminal operation, to UK-based Forth Ports. The £46 million deal, which saw Forth pay £28 million in cash and assume debts of £13 million, generated a €34.9 million return for Milestone, equivalent to four times its original equity investment. The firm had backed a £13 million management buyout in August 2005.
Milestone has been hitting the exit trail in earnest as it prepares to start talking to investors about fundraising later this quarter.

It has also been looking to appease those limited partners who last year encouraged it to cut costs and wind down its current portfolio, having failed to see any returns from the firm’s third fund, which raised €223.5 million in 2002. Subequently, co-founder Robert Mason and two other equity partners left the firm, with co-founder Bill Robinson and Rinner taking over as managing partners. The business also changed its name from European Acquisition Capital to Milestone Capital Partners, and started selling its assets.