REG - Oakley Capital Inv. - Sale of Contabo and follow-on investment

Oakley Capital InvestmentsAnnouncement

08/06/2022 07:00

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RNS Number : 0713O  Oakley Capital Investments Limited  08 June 2022

8 June 2022

Oakley Capital Investments Limited

 

Oakley Capital Investments Limited(1) ("OCI") is pleased to announce that
Oakley Capital Fund IV(2) ("Fund IV") has reached an agreement to sell its
stake in Contabo, a leading cloud hosting platform used by SMEs.

OCI's share of proceeds will be c.£59 million and the sale represents a
c.105% premium to the 31 March 2022 carrying value, an uplift of c.17 pence
per share to the Company's NAV.

As part of the transaction, Oakley Capital Fund V ("Fund V") will invest in
Contabo alongside KKR. OCI's indirect contribution via Fund V will be c.£37
million.

Note that the above figures only relate to OCI's share of proceeds and its
share of Fund V's overall investment in Contabo.

OCI's liquid resources available for future deployment (including this
transaction) are estimated to be c.£178 million.

Further details on the transaction can be found in the below announcement from
Oakley Capital(3.)

 

Oakley Capital agrees sale of Contabo and follow-on investment

Oakley Capital ("Oakley") is pleased to announce that Oakley Capital Fund IV
("Fund IV") has reached an agreement to sell its stake in Contabo, a leading
cloud hosting platform offering easy-to-use and cost-effective cloud services
used by SMEs, entrepreneurs and developers. The exit will generate a gross
return in excess of 10x MM and over 100% IRR to Fund IV. As part of the
transaction, Oakley Capital Fund V ("Fund V") will acquire a minority stake in
Contabo alongside majority investor KKR, to benefit from the anticipated
future growth of the business.

Fund IV first invested in Contabo in 2019 alongside proven hosting
entrepreneurs Thomas Strohe, Jochen Berger and Thomas Vollrath who introduced
the opportunity to Oakley. Under Oakley's ownership, Contabo has generated
strong revenue and EBITDA growth to become a leading SME cloud hosting
provider with 24 lean and highly efficient data centres across four continents
serving a diversified mix of more than 250,000 customers. In 2020, Czech
hosting business VSHosting was acquired to expand Contabo's international
footprint, followed by GPORTAL in 2021, a rapidly growing
'platform-as-a-service' provider in the gaming space.

The strategic partnership with KKR and fresh investment from Oakley will
support the next stage of Contabo's growth plan including acquisitions, and
enable Contabo to continue its successful growth journey to become a global
leader in SME cloud hosting. The company is well positioned in a market that
has shown very strong and resilient growth in recent years, driven by
structural trends and market dynamics, including increasing data traffic, the
ongoing digitisation of small businesses as well as the increasing use of
cloud applications.

Contabo CEO, Thomas Noglik, commented:

"When we first invested in Contabo three years ago, the business was very much
a relatively unknown, subscale player in the domestic German web-hosting
market. In partnership with Oakley, we leveraged our combined experience in
cloud hosting and our track record in successfully professionalising
businesses to transform Contabo into the market-leader it is today. We're
pleased to be continuing our collaboration with Oakley and now with KKR's
support and sector expertise as we proceed with the next stage of the
company's growth plan."

Jean-Pierre Saad, Partner and Head of Technology for Private Equity in EMEA
and Laura Schröder, Director at KKR, commented:

"The demand for cloud infrastructure and hosting services has considerably
accelerated over recent years, and is set to further increase due to the
ongoing digitalisation of small businesses and secular growth of the developer
community. With its differentiated positioning in the market based on
price-performance leadership and strong customer satisfaction, Contabo
benefits from these market trends. We are excited by the opportunity to work
with the management team and Oakley to unlock the significant potential in
Contabo, drawing on our extensive expertise from investing in the cloud and
hosting industry globally."

Oakley Capital Managing Partner, Peter Dubens, commented:

"Over more than a decade, Oakley has built significant expertise investing in
the attractive web-hosting sector. We are pleased to sustain our strong track
record with Contabo, and look forward to continuing our partnership with
management to deliver on our ambition for the company. We also welcome KKR as
co-investors with their deep experience in technology investing and the DACH
region."

- ends -

 

For further information please contact:

 

Oakley Capital Limited

+44 20 7766 6900

Steven Tredget

 

Greenbrook Communications Limited

+44 20 7952 2000

Rob White / Michael Russell

 

Liberum Capital Limited (Financial Adviser & Broker)

+44 20 3100 2000

Chris Clarke / Darren Vickers / Owen Matthews

 

Notes:

LEI Number: 213800KW6MZUK12CQ815

(1 )About Oakley Capital Investments Limited ("OCI")

OCI is a Specialist Fund Segment ("SFS") traded investment vehicle that aims
to provide shareholders with consistent long-term capital growth in excess of
the FTSE All-Share Index by providing liquid access to private equity returns
through investment in the Oakley Funds.

A video introduction to OCI is available
at https://oakleycapitalinvestments.com/videos/
(https://oakleycapitalinvestments.com/videos/)

The contents of the OCI website are not incorporated into, and do not form
part of, this announcement.

(2) The Oakley Funds

Oakley Capital Private Equity L.P. and its successor funds, Oakley Capital
Private Equity II, Oakley Capital Private Equity III, Oakley Capital IV,
Oakley Capital V and Oakley Capital Origin Fund are unlisted lower-mid to
mid-market private equity funds that aim to provide investors with significant
long-term capital appreciation. The investment strategy of the Funds is to
focus on buy-out opportunities in industries with the potential for growth,
consolidation and performance improvement.

(3) Oakley Capital, the Investment Adviser

Founded in 2002, Oakley Capital Limited has demonstrated the repeated ability
to source attractive growth assets at attractive prices. To do this it relies
on its sector and regional expertise, its ability to tackle transaction
complexity and its deal generating entrepreneur network.

Important information

Specialist Fund Segment securities are not admitted to the Official List of
the Financial Conduct Authority. Therefore, the Company has not been required
to satisfy the eligibility criteria for admission to listing on the Official
List and is not required to comply with the Financial Conduct Authority's
Listing Rules.

The Specialist Fund Segment is intended for institutional, professional,
professionally advised and knowledgeable investors who understand, or who have
been advised of, the potential risk from investing in companies admitted to
the Specialist Fund Segment.

This announcement may include "forward-looking statements". These
forward-looking statements are statements regarding the Company's objectives,
intentions, beliefs or current expectations with respect to, amongst other
things, the Company's financial position, business strategy, results of
operations, liquidity, prospects and growth. Forward-looking statements are
subject to risks and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future.  Accordingly the
Company's actual future financial results, operational performance and
achievements may differ materially from those expressed in, or implied by, the
statements. Given these uncertainties, prospective investors are cautioned not
to place any undue reliance on such forward-looking statements, which speak
only as at the date of this announcement. The Company expressly disclaims any
obligation or undertaking to update or revise any forward-looking statements
contained herein to reflect actual results or any change in the Company's
expectations with regard to them or any change in events, conditions or
circumstances on which any such statements are based unless required to do so
by the Financial Services and Markets Act 2000, the Listing Rules or
Prospectus Regulation Rules of the Financial Conduct Authority or other
applicable laws, regulations or rules.

 

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