TIDMOCI

RNS Number : 0713O

Oakley Capital Investments Limited

08 June 2022

8 June 2022

Oakley Capital Investments Limited

Oakley Capital Investments Limited(1) ("OCI") is pleased to announce that Oakley Capital Fund IV(2) ("Fund IV") has reached an agreement to sell its stake in Contabo, a leading cloud hosting platform used by SMEs.

OCI's share of proceeds will be c.GBP59 million and the sale represents a c.105% premium to the 31 March 2022 carrying value, an uplift of c.17 pence per share to the Company's NAV.

As part of the transaction, Oakley Capital Fund V ("Fund V") will invest in Contabo alongside KKR. OCI's indirect contribution via Fund V will be c.GBP37 million.

Note that the above figures only relate to OCI's share of proceeds and its share of Fund V's overall investment in Contabo.

OCI's liquid resources available for future deployment (including this transaction) are estimated to be c.GBP178 million.

Further details on the transaction can be found in the below announcement from Oakley Capital(3.)

Oakley Capital agrees sale of Contabo and follow-on investment

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.

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 considerably accelerated over recent years, and is set to further increase due to the ongoing digitalisation 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:

"Over more than 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."

- ends -

For further information please contact:

Oakley Capital Limited

+44 20 7766 6900

Steven Tredget

Greenbrook Communications Limited

+44 20 7952 2000

Rob White / Michael Russell

Liberum Capital Limited (Financial Adviser & Broker)

+44 20 3100 2000

Chris Clarke / Darren Vickers / Owen Matthews

Notes:

LEI Number: 213800KW6MZUK12CQ815

(1) About Oakley Capital Investments Limited ("OCI")

OCI is a Specialist Fund Segment ("SFS") traded investment vehicle that aims to provide shareholders with consistent long-term capital growth in excess of the FTSE All-Share Index by providing liquid access to private equity returns through investment in the Oakley Funds.

A video introduction to OCI is available at https://oakleycapitalinvestments.com/videos/

The contents of the OCI website are not incorporated into, and do not form part of, this announcement.

(2) The Oakley Funds

Oakley Capital Private Equity L.P. and its successor funds, Oakley Capital Private Equity II, Oakley Capital Private Equity III, Oakley Capital IV, Oakley Capital V and Oakley Capital Origin Fund are unlisted lower-mid to mid-market private equity funds that aim to provide investors with significant long-term capital appreciation. The investment strategy of the Funds is to focus on buy-out opportunities in industries with the potential for growth, consolidation and performance improvement.

(3) Oakley Capital, the Investment Adviser

Founded in 2002, Oakley Capital Limited has demonstrated the repeated ability to source attractive growth assets at attractive prices. To do this it relies on its sector and regional expertise, its ability to tackle transaction complexity and its deal generating entrepreneur network.

Important information

Specialist Fund Segment securities are not admitted to the Official List of the Financial Conduct Authority. Therefore, the Company has not been required to satisfy the eligibility criteria for admission to listing on the Official List and is not required to comply with the Financial Conduct Authority's Listing Rules.

The Specialist Fund Segment is intended for institutional, professional, professionally advised and knowledgeable investors who understand, or who have been advised of, the potential risk from investing in companies admitted to the Specialist Fund Segment.

This announcement may include "forward-looking statements". These forward-looking statements are statements regarding the Company's objectives, intentions, beliefs or current expectations with respect to, amongst other things, the Company's financial position, business strategy, results of operations, liquidity, prospects and growth. Forward-looking statements are subject to risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Accordingly the Company's actual future financial results, operational performance and achievements may differ materially from those expressed in, or implied by, the statements. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements, which speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the Company's expectations with regard to them or any change in events, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Regulation Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.

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