Nitel Valued at $700 Million After Cinven Takes Stake

(Bloomberg) -- Private-equity firm Cinven Ltd. has agreed to make a significant investment in technology services provider Nitel, according to a statement reviewed by Bloomberg. 

While terms of the transaction weren’t disclosed, the deal values the company at about $700 million, according to people familiar with the matter who asked not to be identified discussing private information. A representative for Cinven declined to comment on the valuation.

Chicago-based Nitel provides access to internet and networking-technology services to small- and midsize businesses. Founded in 2003, its clients include companies that have shifted to cloud-based networks, a trend that is expected to accelerate over the next few years. 

“The Nitel team has worked hard and done an excellent job in growing the business organically, and we look forward to exploring new opportunities to support the company’s growth ambitions both organically and through acquisitions in the future,” Cinven Partner Chris Good said in the statement.

Technology services firms in the Chicago area have been hot commodities. Last month, CDW Corp. announced an agreement to acquire Sirius Computer Solutions Inc. from an affiliate of Clayton Dubilier & Rice for $2.5 billion. Also in October, Bloomberg News reported that MSD Partners had agreed to take a 50% stake in digital consulting firm West Monroe, which was valued at $2.5 billion in the deal.

Cinven was drawn to Nitel because of its role in the $28 billion market for internet connectivity services, according to the statement. Companies increasingly need more data and networking capabilities and Nitel also has the potential to cross-sell products such as security services to its customers. 

Nitel is run by co-founders Rick Stern, its chief executive officer, and Ron Grason, its president. 

The deal is Cinven’s third telecom, media and technology stake in the U.S., after its investments in Drake Software and Jaggaer. 

SVB Technology Investment Banking, Altman Solon and Kirkland & Ellis advised Cinven on the deal. 

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