Oak Hill Acquires Email Specialist Intermedia

Private equity firm Oak Hill Capital has acquired Intermedia.net, a specialist in Microsoft Exchange hosting services, and appointed former Savvis executive Phil Koen as Chairman and CEO to run the company. The terms of the transaction were not disclosed.

Intermedia has been a leading player in business e-mail hosting. The company manages more than 320,000 Microsoft hosted Exchange mailboxes to 38,000 business customers directly and through its 6,800 global channel partners. Intermedia's user base has grown at an annual compounded rate of 31 percent over the last four years.

Oak Hill Capital has invested in a number of companies in the data center sector, including ViaWest, Savvis, The Telecity Group and Cincinnati Bell. Robert M. Bass is the lead investor in the private equity firm, which has more than $8.4 billion of committed capital.

"We are still in the early stages of a dramatic shift in IT from the corporate premise to the cloud, and Intermedia is in an ideal position to accelerate this shift," said Robert Morse, a Partner at Oak Hill Capital. "We look forward to working with Phil Koen and the rest of the management team to drive Intermedia's next stage of growth."

Koen was CEO of managed hosting specialist Savvis (SVVS) from 2006 to 2010. Prior to that, he served as President and COO of Equinix (NASDAQ:EQIX - News), a provider of colcoation and Internet exchange services, from 2002 to 2006. He currently serves on the Board of Directors for Infinera Corp, ViaWest, Proofpoint and Vette Corp.

"Intermedia has a phenomenal record of execution and industry leadership, and I am delighted to join in leading the company forward," said Koen. "As a pioneer and now significant player in cloud-based IT services, Intermedia has tremendous potential for further growth by delivering more cost-effective solutions to companies whose on-premise IT is moving to the cloud. We intend to build Intermedia into a leading provider of a broad suite of cloud services to SMBs and the channels that serve them, with Microsoft Exchange email as the core service."

"Oak Hill Capital and Phil Koen are the perfect partners to help Intermedia realize its full potential, given the combination of their strong capital base, deep industry knowledge, and history of successfully growing companies like ours," said Serguei Sofinski, outgoing Intermedia CEO and shareholder. "Intermedia is well-positioned to be the premier provider of cloud services given the full-service experience we have developed for our customers - and the proprietary cloud infrastructure and tools we use to deliver it."

The transaction is expected to close during the second quarter of 2011. Stifel Nicolaus Wiesel is acting as exclusive financial advisor to Intermedia, and Feinberg Law Group, LLC is serving as legal counsel. Wilson Sonsini Goodrich & Rosati is serving as legal counsel to Oak Hill Capital. Sullivan & Cromwell LLP is serving as legal counsel to Michael Choupak, Intermedia's largest shareholder.