OVH, one of the largest providers of cloud servers and web hosting services, has finalized a partnership with global investment firms, KKR and TowerBrook Capital Partners (TowerBrook). KKR and TowerBrook will acquire a minority stake in OVH for €250 million of growth capital.
The €250 million investment would allow OVH to take advantage of the rapidly expanding market for cloud and Internet infrastructure services, while also broadening its customer base and services in new geographies, particularly in the U.S. market and Asia.
Founded in 1999 by Octave Klaba, OVH has grown rapidly to become one of the leading providers of dedicated cloud infrastructure in Europe with a total of 250,000 servers across 17 data centers in France and Canada. OVH’s turnover for FY 2016 stands at €320 million.
The Klaba family will retain the majority stake in the company and will continue, together with OVH management, to lead the company, its strategy and operations.
“KKR and TowerBrook are the perfect partners for OVH as we look to take the next step in our development into a truly global technology company,” said Octave Klaba, Founder, Chairman and CTO of OVH. “With their support, we are looking forward to scaling our company into new markets, while remaining completely committed to delivering excellence in security, service and innovation that our current customers expect.”
Demand for IaaS and PaaS
The Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) markets are expected to continue to grow rapidly, driven in large part by the exploding demand for cloud services. With its hybrid cloud product portfolio, including both private and public cloud infrastructure and strict data protection policies in line with European standards, OVH would be perfectly positioned to take advantage of this growth.
“This capital increase will allow us to invest €1.5 billion over 5 years,” said Laurent Allard, CEO of OVH. “The aim is to provide ourselves with the means to consolidate our leading position in Europe and become a key global player in the cloud market. OVH already has strong assets (one of the largest server farms worldwide, 17 data centers, record energy efficiency indicators…), as well as an ambitious development plan for the next five years. Besides capital, TowerBrook and KKR will bring substantial operational expertise. Both firms have a successful track record in supporting entrepreneurs to grow their business to the next level.”
KKR has an extensive track record of partnering with entrepreneurs and family-owned companies in Europe to deliver growth, international expansion, and value creation as well as expertise in supporting fast-growing European technology companies in developing their global presence. This includes the recent investments in Webhelp, Fotolia, SoftwareONE and Darktrace.
TowerBrook‘s extensive transatlantic network would enable it to successfully partner with entrepreneurial businesses to open up new opportunities and create market-leading companies. This partnership approach would fit well with founder-led businesses while delivering real value to French companies as diverse as Infopro, Autodistribution and Kaporal.
“Over the past 17 years, the Klaba family has built OVH into a true European technology champion,” said Jean-Pierre Saad, Director at KKR EMEA. “We are excited to be supporting the company in the next phase of its global expansion, particularly in the US market and Asia and look forward to continuing our strong track record of partnerships with successful European entrepreneurs.”