Presidio taken public in $2.1bn BC Partners deal

November 2019 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

November 2019 Issue

Just two years after its initial public offering (IPO), information technology service company Presidio Inc is to be acquired by European investment firm BC Partners in an all-cash deal worth $2.1bn, including debt.

Under the terms of the deal, Presidio stockholders will receive $16 a share in cash for each Presidio share they own, a purchase price that represents a 21.3 percent premium over the company’s $13.19 closing stock price on Tuesday 13 August, the day before the deal was announced, and a premium of 18.3 percent over the company’s 60-day volume-weighted average share price leading up to the deal announcement.

The acquisition has been unanimously approved by Presidio’s board of directors and is expected to close in the fourth quarter of 2019. The deal does include a 40 day ‘go-shop’ period that allows Presidio to consider alternative offers, however. Upon completion of the transaction, Presidio will become a privately held company, and its common stock will no longer be listed on the NASDAQ stock market.

AP VIII Aegis, an affiliate of funds managed by Apollo Global Management, holds approximately 42 percent of Presidio’s shares and has agreed to vote in favour of the acquisition. Debt financing for the transaction will be provided by Citi, JPMorgan Chase Bank, N.A. and RBC Capital Markets.

Founded in 2003, Presidio specialises in cloud computing, digital infrastructure and security solutions. The company offers computer networking, collaboration and cyber security products, as well as data analytics and mobile services. In its most recent fiscal year, the company saw a 1.4 percent increase in annual sales to $2.86bn. Adjusted net income increased by 9 percent to $126.4m.

“We believe this transaction will provide immediate and substantial value to Presidio stockholders, while providing us with a partner that can add strategic and operational expertise to our business, with a focus on executing our long-term strategy,” said Bob Cagnazzi, chief executive of Presidio.

“Over the last several years, Presidio has become the leader in designing, developing, deploying and managing agile secure IT infrastructures that drive real business value for thousands of commercial and public sector entities across the United States,” said Fahim Ahmed, lead deal partner of BC Partners. “We look forward to supporting the company in its next phase of growth.”

“Presidio fits squarely with our key investment priorities,” said Raymond Svider, partner and chairman of BC Partners. “Its markets benefit from secular growth, as IT systems and networks have become increasingly complex. It is well positioned as a leader in a fragmented industry, offering scope for further expansion. We’re excited to partner with Bob and his team to support the future growth of the business.”

BC Partners holds investments in 108 companies across 17 countries with a combined enterprise value of $151bn. The private equity firm purchased CEO advisory firm Teneo for $400m in 2015, and in May 2017 bought CenturyLink’s data centres for $2.75bn and renamed it Cyxtera.

New York-based Presidio has changed hands regularly over the last decade; BC Partners will become the fourth organisation to own the company during that time. In 2011, Presidio was purchased by private equity firm American Securities for an undisclosed amount. Three and a half years later it was sold to private equity firm Apollo Global Management, also for an undisclosed amount. In March 2017, the company raised $233.8m in an IPO that saw the company’s stock begin trading at $14 per share.

London-based BC Partners has around $24.52bn assets under management. Previous high-profile acquisitions by the firm include the purchase of CenturyLink’s data centre operations in 2016 and the purchase of Chewy, a pet e-commerce company, from PetSmart for $3.4bn in 2017.

Richard Summerfield