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Milestone Capital sells IXEurope to Equinix

Milestone Capital Partners has completed the sale of IXEurope to Equinix for a consideration of 140p per share, valuing the entire company at GBP250m.

Milestone Capital Partners has completed the sale of IXEurope to Equinix for a consideration of 140p per share, valuing the entire company at GBP250m. The GBP79m received by Milestone for its 31 per cent stake in IXEurope represents a return on invested capital of 2.9 times in sterling terms or 2.6 times in euros.

IXEurope is a data centre solutions provider, baby-sitting the hardware and systems of more than 800 clients including European and American financial institutions, large corporations and system integrators.

The company is one of the few survivors from what was known as the internet hotel sector during the dot.com boom of the late 1990s and currently has 14 data centres in the UK, Germany, France and Switzerland.

Through EAC Fund II, Milestone acquired a majority stake in IXEurope in 1999, backing the management team led by Sir Anthony Cleaver, Guy Willner and Christophe de Buchet, at a time when the company had one data centre in operation, in the City of London. Since then Milestone has overseen a conservative pan-European build-up strategy with low financial leverage.

As the lead investor, Milestone helped to raise more than EUR120m of equity through four rounds of financing between 2000 and 2003. After pulling an IPO float in late 2000, IXEurope’s earnings before interest, tax, depreciation and amortisation turned positive in 2004, and its revenue has averaged annual growth of more than 30 per cent over the past eight years.

In April 2006, IXEurope listed on the London Stock Exchange’s Aim market at 22p per share, giving it a market capitalisation of GBP40m. Since then, the share price has increased more than sixfold in barely 18 months.

‘We are delighted to have backed Guy and Christophe during those very exciting years from the dot.com boom onwards,’ says Milestone managing partner Erick Rinner. ‘Despite a challenging economic scene, especially from 2000 to 2003, they ultimately hit the targets they had set out in the initial business plan.

‘This has been a success story for all parties, and illustrates Milestone Capital’s ability to build strong businesses through all economic cycles. Given that so many investors have lost substantial sums through investments in this sector over the past eight years, we are very pleased with the return we have provided for our Fund II investors. Including the exit from IXEurope, Milestone has now made five exits and returned around EUR330m to investors since the beginning of this year.’

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