Private equity firm ABRY Partners has bought itself another networking business to go along with its Sidera purchase last year. This time though, it’s not on the fiber side but rather on the managed services side. They have agreed to purchase 100% of Masergy for an undisclosed price. Given Masergy’s 2010 EBITDA of $17.1M on revenues of $102.9M according to filings though, one might extrapolate via common EBITDA margins to get something between $100M and $150M as likely total price tag, though I have no actual information on the subject.
Current management will stay on and ABRY won’t be making major operational changes, except that perhaps now the company will have access to deeper pockets to fund its growth. Masergy’s investors were known to be looking for an exit, and hence probably not interested in funding the company’s plans agressively. They had tested the IPO waters earlier this year, but found them to be too chilly. That other private equity might be able to fill in isn’t surprising at all, as the overall market’s recently more favorable view of the sector still lags that of the private money guys.
One wonders what else might be on ABRY’s shopping list. Sidera is their platform for buying more fiber and bandwidth infrastructure, so perhaps Masergy will serve the same purpose for managed services and perhaps a larger overall move on cloud-based services to the enterprise.
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