CVC buys minority stake in internet infrastructure provider CDN77

By Amy-Jo Crowley and Muvija M

LONDON, Sept 23 (Reuters) - Private equity group CVC has agreed to buy a minority stake in Prague-based internet infrastructure provider CDN77 in a deal that brings in external investment for the first time, the companies said in a statement on Wednesday.

The deal values CDN77 at around $1.9 billion, a source familiar with the matter told Reuters. The statement did not disclose the exact size of the stake nor the financial terms of the transaction.

CVC said it was the largest private equity deal in central and eastern Europe's technology sector this year.

CDN77 Chief Executive Officer Zdenek Cendra, who founded the business in 2011, will retain a majority stake in the company and continue to lead it, with the majority of its senior team also expected to remain in their roles, the statement said.

"What we gain in partnering up with CVC is a sparring partner who has helped companies like ours go from big to much bigger, and who opens doors we could not open ourselves," Cendra said in the statement.

CDN77 provides computing power and storage for streaming, gaming and software companies, and can support their AI and store their data. It counts video-on-demand platform Rakuten TV, "Peaky Blinders" producer Banijay, online education group Udemy and streaming platform Starz among its clients. 

The firm is targeting revenue of about $270 million this year, up from $218 million in 2025, the source said.    

In the statement, CDN77 said it picked CVC because of its understanding of internet infrastructure and its track record of backing founder-led companies, with its top priority being that customers would "see no difference" the day after the transaction.

CVC Senior Managing Director Jakub Canda added that its main task was to allow CDN77 to continue to focus on its customers while at the same time "build faster and go further" wherever they can. 

(Reporting by Amy-Jo Crowley and Muvija M; Editing by Kirsten Donovan)