GI Sells SoftLayer to IBM

MENLO PARK, CA, July 9, 2013 – GI Partners, a leading middle market private equity investment firm, announced today that it has completed the sale of its portfolio company, SoftLayer Technologies, the world's largest privately held cloud computing infrastructure provider, to IBM (NYSE: IBM). 

GI Partners has a successful history of investing in IT infrastructure. Following an evaluation of opportunities in the dedicated hosting sector, the firm acquired EV1 and The Planet in 2006. Four years later, GI acquired SoftLayer and subsequently merged SoftLayer and The Planet. The combined company benefited from significant innovation, scale, and cost efficiencies. Today, SoftLayer operates 13 data centers globally, manages 100,000+ servers, firewalls and load balancers, and serves 21,000+ customers across 140+ countries. 

Rick Magnuson, Executive Managing Director of GI Partners, said, “As an active investor in Internet infrastructure and services for more than a decade, we are pleased to announce this transaction. This is an important area of investment for our firm. Our highest compliments go out to Lance Crosby and his team for their efforts to build a company with a customer-focused product offering, a culture that supports rapid innovation, and a strategy that is well-suited to the rapid changes taking place in cloud computing. I am confident that the company will continue to thrive as an integral part of IBM.” 

Lance Crosby, CEO of SoftLayer, said, “It has been a pleasure working in partnership with GI Partners. Since GI’s investment in 2010, we have undergone a dramatic transformation by upgrading our networks and facilities, broadening our customer base, expanding into international markets, and repositioning the company as a leader in the cloud services arena. Our combination with IBM is a validation of these efforts. We look forward to the opportunity to work as part of the IBM team to broaden our presence in the cloud.” 

Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC have acted as financial advisors to SoftLayer, and Kirkland & Ellis LLP served as legal counsel to SoftLayer. DH Capital, LLC and DLA Piper LLP (US) served as financial advisor and legal counsel, respectively, to the company’s management team.