Australia’s private equity firm Next capital has seized a majority share of Brisbane-based iSeek Communications. According to the Australian Financial Review, the buyout firm has purchased a controlling stake of 51 percent. And iseek founder Jason Gomersall will keep the remaining 49 percent. The deal valued the data storage and cloud services provider at $60 million including debt.
The investment will be made via its Next Capital III fund. As per reports, it has deployed about 75 percent of its capital, with one or two more investments to come.
The deal is another proof of the heightened interest in the Australian data center market. Recently, data center operator NextDC announced $2.25 billion investment in its three new sites in Melbourne, Sydney, and Perth. The sector has also witnessed the US data center giant Equinix’s acquisition of Metronode in a $1 billion deal.
"Thematically a lot is happening in this space. People are trying to find capacity, and you have got the big players like the Amazons and Apples looking to provide their cloud offering," Next partner James Murphy said.
Jason Gomersall started iseek 20 years ago. The independent data storage provider, iSeek has three data centers—two data centers in Brisbane and one in Sydney. Apart from these, its two new data centers are being built in Brisbane and north Queensland.
The data center in Queensland will open in the first quarter next year. And the third data center in Brisbane will be functional in the next three years. The company’s strengths are in data storage, cloud, and connectivity services. It has annual revenue of about $34 million.
Next Capital has plans to take the company public in the near future.
"The thematic is well received by equity markets, it has high returns on capital and sticky long-term cash flow," Mr. Murphy said.