Intermedia surpasses $200 million revenue run-rate; Madison Dearborn to drive further growth and enhance profitability of the global leader in cloud services
MOUNTAIN VIEW, Calif., Sept. 14, 2016 /PRNewswire/ — Intermedia.net, Inc. (“Intermedia”), a leading cloud business applications provider and the world’s largest independent provider of cloud Microsoft® Exchange email, announced today that it has been acquired by Madison Dearborn Partners (“MDP”), a leading private equity firm based in Chicago. As part of the transaction, Intermedia’s shareholders, led by Oak Hill Capital Partners (“Oak Hill”), will sell their stake in the company to MDP and company management.
This marks a new chapter for Intermedia. The partnership with MDP will help accelerate Intermedia’s rapid growth trajectory through increased investment in the company’s channel partner programs, Worry-Free support experience, new and existing products, vertical industry solutions, and additional acquisitions.
“We are proud of the transformation and growth of the company. We now have an annualized revenue run-rate of over $200 million, 75,000 customers, 6,000 active partners and 700 employees around the globe,” says Phil Koen, Executive Chairman of Intermedia.
Michael Gold, who will remain Intermedia’s CEO, adds, “Over the past five years, we’ve more than tripled our revenues, EBITDA, users and product offerings. We’ve also experienced dramatic growth of our customer and partner base. Along the way, we’ve built a rock-solid management team to take the company forward, including recent CFO and SVP of Worldwide Sales appointments from Dropbox® and Microsoft®, respectively. We are well set for even bigger things to come in partnership with MDP.”
Since its founding in 1995, Intermedia has been a pioneer in delivering secure, reliable, and highly-supported cloud business applications. In May 2011, Intermedia was acquired by Oak Hill in close partnership with Koen and Gold, with a vision for an “Office in the Cloud™” for businesses and the channel partners that serve them. Under their leadership, Intermedia transformed from a business email and web hosting company to a leading provider of over 30 integrated cloud applications, including:
- Intermedia-developed proprietary technologies such as SecuriSync® online backup and file sharing; HostPilot® control panel; Advanced Email Security (AES) and a wide range of other security products; and VoIP Scout™ network testing tools;
- Acquired proprietary technologies, including Telanetix’s AccessLine brand of voice and unified communication services, and SaaSID’s dynamic identity and access management offering; and
- Other applications such as cloud Microsoft Exchange, Office 365® productivity applications, archiving, encryption and more.
“We are pleased to partner with Intermedia to build upon the company’s momentum and demonstrated track record of growth in the increasingly critical field of cloud-based communications and productivity solutions,” says Zaid Alsikafi, a Managing Director at MDP. “Intermedia is successfully capitalizing upon the global shift to the cloud, and possesses tremendous upside potential to capture further opportunities with its reach, scalability, customer support offerings and enhanced product functionality. We have a long-standing relationship with Mike and look forward to working with him and his management team and applying our expertise with fast-growing technology companies to help take the business to the next level.”
“The Intermedia team has done an outstanding job of becoming a market leader in a competitive space,” says David Scott, Partner at Oak Hill. “Under the leadership of Phil and Mike, the company has created tremendous value, transformed its strategy, and scaled the business. We are very pleased with the company’s accomplishments and we look forward to watching Intermedia’s promising next chapter unfold with MDP.”
Koen elaborates, “First with Oak Hill, and now as we embark on this next chapter with MDP, Intermedia is well-positioned for further growth. With Oak Hill’s support, we’ve built a core technology platform, while expanding the applications suite on top. We look forward to building upon this momentum with the benefit of the MDP team’s expertise.”
Gold adds, “I couldn’t be more excited about the vision that Intermedia and MDP share. Recognizing that the channel influences 65-75% of IT spending1, we’ve built our business to meet the needs of the channel. Intermedia’s cloud applications and management platform provide a number of key benefits for our partners, including a private label model, as well as operational, technical, marketing, and sales support. With MDP, I look forward to further strengthening our leadership position in the $20+ billion cloud business applications market.”
The transaction is expected to close this calendar year, subject to customary regulatory approvals and other customary closing conditions. Deutsche Bank and J.P. Morgan are serving as financial advisors to Intermedia. Wilson Sonsini Goodrich & Rosati, Professional Corporation, is acting as legal advisor to Intermedia, with Pillsbury Winthrop Shaw Pittman LLP serving as regulatory counsel to Intermedia. Evercore and SunTrust Robinson Humphrey are serving as financial advisors to MDP, with SunTrust Robinson Humphrey, and TD Securities leading financing for the transaction. Kirkland & Ellis LLP is acting as legal advisor to MDP, while Covington & Burling LLP is serving as regulatory counsel for MDP. Terms of the transaction were not disclosed.
About Intermedia Intermedia is a one-stop shop for cloud business applications. Its Office in the Cloud™ suite integrates the essential IT applications that companies need to do business, including email, voice, file backup and sharing, conferencing, instant messaging, identity and access management, mobility, security and archiving – all delivered by a single provider.
Think of Office in the Cloud as your “Business Cloud Platform.” Intermedia’s applications are integrated into its HostPilot® control panel. There’s just one login, one password, one bill and one source of support, which creates significant cross-service efficiencies for both users and IT administrators. Intermedia offers enterprise-grade security, a 99.999% uptime service level agreement and 24/7 phone support with typical hold times of less than 60 seconds.
Intermedia’s over 700 employees serve over 1,000,000 users across over 75,000 businesses and 6,000 active partners, including VARs, MSPs, key distributors and telecoms. Its award-winning Partner Program lets partners sell under their own brand with control over billing, pricing and other elements of their customer relationships. Intermedia is the world’s largest independent provider of Exchange email and a leading phone system provider. For more information, visit Intermedia.net.
About Madison Dearborn Partners
Madison Dearborn Partners (MDP), based in Chicago, is a leading private equity investment firm in the United States. Since MDP’s formation in 1992, the firm has raised seven funds with aggregate capital of approximately $23 billion and has completed approximately 130 investments. Intermedia will become a portfolio company in MDP’s seventh fund, which recently held a final close on $4.4 billion. MDP invests in businesses across a broad spectrum of industries, including telecom, media and technology services; financial and transaction services; business and government services; health care; basic industries; and consumer. Notable investments include Asurion, Cbeyond, Fieldglass, Intelsat, Liquid Web, MetroPCS, NextG Networks and QuickPlay Media. For more information, please visit http://www.mdcp.com.
About Oak Hill Capital Partners
Oak Hill is a private equity firm managing funds with more than $9.0 billion of initial capital commitments since inception from leading entrepreneurs, endowments, foundations, corporations, pension funds, and global financial institutions. Over the past 30 years, the professionals at Oak Hill and its predecessors have invested in 81 significant private equity transactions across broad segments of the U.S. and global economies. Oak Hill applies an industry-focused, theme-based approach to investing in the following sectors: Consumer, Retail & Distribution; Industrials; Media & Communications; and Services. Oak Hill works actively in partnership with management to implement strategic and operational initiatives to create franchise value. For more information, please visit www.oakhillcapital.com.