Oak Hill, GI Partners Close ViaWest Deal

Oak Hill Capital Partners said today that it has completed its acquisition of managed hosting provider ViaWest, in partnership with the company’s management team. The press release included one new infonugget - the participation of GI Partners, which has a minority investment in ViaWest. The financial terms of the transaction were not disclosed.

GI Partners has a high profile in the data center and web hosting sector from its ownership of The Telx Group and The Planet, as well as its role in forming Digital Realty Trust. Oak Hill Capital has invested in a number of companies in the data center sector, including Savvis, The Telecity Group and Cincinnati Bell.

“We are very pleased to move forward in our new partnership with Oak Hill Capital," said Michael Krza, CFO of ViaWest. "I cannot overstate the efforts of all parties involved to make this a seamless process, and we couldn't be happier about the addition of another knowledgeable industry investor in GI Partners."

The deal is the latest in a series of deals in which private equity firms have acquired regional managed hosting companies. Denver-based ViaWest has expanded its data center footprint in the western U.S. through a series of acquisitions, and now operates 16 facilities in Colorado, Texas, Oregon, Utah, and Nevada. The company, which was founded in 1999 by Dimoff and Chief Operating Officer Nancy Phillips, has more than 1,000 customers.

Senior debt financing was arranged by Royal Bank of Canada, and mezzanine financing was provided by Barclays Structured Principal Investing Fund L.P. and Solar Capital Ltd. RBC Daniels and Cowen and Company served as financial advisors to ViaWest in the transaction. Winston & Strawn LLP served as legal counsel to the former owners, Trinity Equity Investors, Goldman, Sachs & Co. and Quilvest. Hogan & Hartson LLP served as legal counsel to ViaWest. Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to Oak Hill Capital Partners.