Oakley Capital (“Oakley”) is pleased to announce that Oakley Capital Fund IV (“Fund IV”) has reached an agreement to sell its stake in Contabo, a leading cloud hosting platform offering easy-to-use and cost-effective cloud services used by SMEs, entrepreneurs and developers. The exit will generate a gross return in excess of 10x MM and over 100% IRR to Fund IV. As part of the transaction, Oakley Capital Fund V (“Fund V”) will acquire a minority stake in Contabo alongside majority investor KKR, to benefit from the anticipated future growth of the business.
Fund IV first invested in Contabo in 2019 alongside proven hosting entrepreneurs Thomas Strohe, Jochen Berger and Thomas Vollrath who introduced the opportunity to Oakley. Under Oakley’s ownership, Contabo has generated strong revenue and EBITDA growth to become a leading SME cloud hosting provider with 24 lean and highly efficient data centres across four continents serving a diversified mix of more than 250,000 customers. In 2020, Czech hosting business VSHosting was acquired to expand Contabo’s international footprint, followed by GPORTAL in 2021, a rapidly growing ‘platform-as-a-service’ provider in the gaming space.
The strategic partnership with KKR and fresh investment from Oakley will support the next stage of Contabo’s growth plan including acquisitions, and enable Contabo to continue its successful growth journey to become a global leader in SME cloud hosting. The company is well positioned in a market that has shown very strong and resilient growth in recent years, driven by structural trends and market dynamics, including increasing data traffic, the ongoing digitisation of small businesses as well as the increasing use of cloud applications.
Arma Partners and DH Capital acted as financial advisors to Contabo, and Kirkland & Ellis International LLP acted as legal advisor to Contabo in connection with this transaction.
Contabo CEO, Thomas Noglik, commented: “When we first invested in Contabo three years ago, the business was very much a relatively unknown, subscale player in the domestic German web-hosting market. In partnership with Oakley, we leveraged our combined experience in cloud hosting and our track record in successfully professionalising businesses to transform Contabo into the market-leader it is today. We’re pleased to be continuing our collaboration with Oakley and now with KKR’s support and sector expertise as we proceed with the next stage of the company’s growth plan.”
Jean-Pierre Saad, Partner and Head of Technology for Private Equity in EMEA and Laura Schröder, Director at KKR, commented: “The demand for cloud infrastructure and hosting services has accelerated considerably over recent years, and is set to further increase due to the ongoing digitalization of small businesses and secular growth of the developer community. With its differentiated positioning in the market based on price-performance leadership and strong customer satisfaction, Contabo benefits from these market trends. We are excited by the opportunity to work with the management team and Oakley to unlock the significant potential in Contabo, drawing on our extensive expertise from investing in the cloud and hosting industry globally.”
Oakley Capital Managing Partner, Peter Dubens, commented: “For over a decade, Oakley has built significant expertise investing in the attractive web-hosting sector. We are pleased to sustain our strong track record with Contabo, and look forward to continuing our partnership with management to deliver on our ambition for the company. We also welcome KKR as co-investors with their deep experience in technology investing and the DACH region.”