Private equity player BC Partners plans to purchase Presidio for $2.1 billion, just two and a half years after the Cisco solution provider powerhouse completed its initial public offering.
The London-based private equity firm has agreed to buy New York-based Presidio, No. 23 on the 2019 CRN Solution Provider 500, for $16 per share, which represents a 21.3 percent increase over the company’s closing stock price Tuesday of $13.19 per share. Presidio’s stock hasn’t traded above $16 per share since March.
“We believe this transaction will provide immediate and substantial value to Presidio stockholders, while providing us with a partner that can add strategic and operational expertise to our business, with a focus on executing our long-term strategy,” Presidio CEO Bob Cagnazzi said in a statement.
The acquisition has been unanimously approved by Presidio’s board of directors and is expected to close in the fourth quarter of this year. Presidio’s stock is up $2.81, or 21.3 percent, in pre-market trading Wednesday to $16 per share.
“Over the last several years, Presidio has become the leader in designing, developing, deploying and managing agile secure IT infrastructures that drive real business value for thousands of commercial and public sector entities across the United States,” BC Partners lead deal partner Fahim Ahmed said in a statement. “We look forward to supporting the company in its next phase of growth.”
BC Partners holds investments in 108 companies across 17 countries with a combined enterprise value of $151 billion. The private equity firm purchased CEO advisory firm Teneo for $400 million in 2015, and in May 2017 bought CenturyLink’s data centers for $2.75 billion, infused the company with cybersecurity expertise, and renamed it Cyxtera.
“Presidio fits squarely with our key investment priorities,” BC Partners partner and Chairman Raymond Svider said in a statement. “Its markets benefit from secular growth, as IT systems and networks have become increasingly complex. It is well positioned as a leader in a fragmented industry, offering scope for further expansion.”
BC Partners will become the fourth entity to own Presidio this decade. The solution provider was purchased seven years after its founding in April 2011 by private equity firm American Securities for an undisclosed amount, and was then sold three and a half years later to private equity firm Apollo Global Management for an undisclosed amount.
In March 2017, Presidio raised $233.8 million in an initial public offering that saw the company’s stock begin trading at $14 per share. Since then, Presidio’s stock climbed to an all-time high of $19.32 in January 2018, before bottoming out at $12.79 per share in December 2018.
In Presidio’s most recent fiscal year, which ended June 30, 2018, the company saw annual sales inch ahead by 1.4 percent to $2.86 billion while adjusted net income climbed 9 percent to $126.4 million.
Cisco accounted for 64 percent of Presidio’s manufacturer purchases in the 2018 fiscal year, according to a filing with the U.S. Securities and Exchange Commission, with Dell EMC accounting for 9 percent of manufacturer purchases and Palo Alto Networks accounting for 2 percent of manufacturer purchases.