TierPoint Management Teams Up With Investors to Buy, Recapitalize the Company

TierPoint, a data center service provider, has been acquired by its management and a group of investors experienced across the communications infrastructure industry.

The company was founded in July 2010 as Cequel Data Centers after its owners acquired Colo4. Cequel acquired TierPoint in 2012, which became the brand name for the portfolio. The acquisition puts TierPoint in a good position for future investments and acquisitions with fresh recapitalization. Terms were not disclosed.

Several new investors are aboard to help expand the company as it has expanded in the past: through targeted acquisitions in underserved regional markets. TierPoint operates six WAN-connected data centers in Dallas, Oklahoma City, Tulsa, Spokane, Seattle and Baltimore, a portfolio built through acquisitions.

The investor group includes Chairman Jerry Kent, RedBird Capital Partners, The Stephens Group, Jordan/Zalaznick Advisers and Thompson Street Capital Partners. TierPoint’s CEO Paul Estes,and the existing management team will continue to lead the business.

“Our new financial partners bring a long-term orientation and expertise in building high-growth communications businesses. With their involvement and this recapitalization we are well-positioned to continue investing in our infrastructure, technologies and people," Estes said. “We plan to acquire additional strategically sound assets and continue building TierPoint into an industry-leading company.”

Classic data center rollup

TierPoint is an example of what is often referred to as a "rollup" play, where investors -- usually private equity -- buy up small companies that compete in the same market and make business gain through economy of scale.

St. Louis telco- and cable-focused investment and management firm Cequel III formed Cequel Data Centers in 2010 and bought Colo4Dallas (which later became Colo4). Two private equity firms, Thompson Street Capital Partners, also of St. Louis, and Charterhouse Group of New York, then joined Cequel's data center business. Later, Cequel acquired Perimeter Technology, which formed its Oklahoma footprint, and then TierPoint.

Today, the company manages about 140,000 square feet of data center space, a footprint primed to grow with the new investors aboard.

“This transaction is a confirmation of our strategy led by our talented management partners at TierPoint to create a leader in data center services, targeting underserved regional markets,” said Jim Cooper, managing partner of Thompson Street Capital Partners. “The recapitalization is a win-win, providing additional resources to fund the company’s unique growth strategy, while simultaneously generating a strong return for our investors.”