Tuesday, October 17, 2017

Digital Bridge readies $1bn acquisition of Vantage Data Centers

Report: M&A would see private equity Silver Lake sell nearly 100 acres of colocation with a top potential of 125 MW of IT load.

Data centre investment firm Digital Bridge Holdings has entered an agreement to acquire Vantage Data Centers from private equity Silver Lake Partners in a transaction expected to top more than $1bn, sources have said.

According to Reuters, the value includes debt and the acquisition is expected to be formally announced in the coming weeks, three people familiar with the matter added.

News on Silver Lake Partners intention to sell Vantage Data Centers first broke in October 2016.

Vantage Data Centers is based in Santa Clara, California, and was founded in 2010 after the acquisition of an Intel data centre campus in Silicon Valley by Silver Lake.

Silver Lake has over $24bn in combined assets under management and committed capital.

Vantage Data Centers’ potential new owner Digital Bridge’s interest in the company shows an ongoing and growing consolidation trend that is occurring across the industry worldwide.

At the Finance and Investment Forum 2017 in London this Thursday, when speking of the global data centre trends expected for this year, Jonathan Atkin, MD at RBC Capital Markets said industry consolidation will continue as the market becomes more mature.

Digital Bridge’s data centre portfolio counts with several deals in the hosting space, including for example, the acquisition of provider DataBank and its six data centres in July 2016.

The company has also made several acquisitions in the telco sector, including Andean Tower Partners, Mexico Tower Partners, Vertical Bridge and ExteNet Systems.

Quincy campus currently under construction. Source: VDCs

As for Vantage Data Centers, the provider runs two data centre campus in Santa Clara and Quincy, Washington.

The Santa Clara campus comprises two data centres with expansion currently taking place. Santa Clara Campus I is an 18-acre hub with 335,000 sqf of data centre space with 51 Mw of IT load.

The company is adding two more data centres to the campus comprising 21 MW of power. The buildings are expected to be put to work gradually from H2 2017.

In addition, the company has announced plans to build an additional data centre campus comprising four buildings of 54 MW also in Santa Clara.

The expansions are being financed through a $295m bank facility upsizing, completed by Vantage in February 2016, which increased the credit facility to $570m.

Elsewhere, Vantage runs a data centre campus in Quincy sitting on a 68-acre piece of land. The area has a potential for data centre hosting space amounting to 400,000 sqf, 55 MW and four buildings. Currently, 6MW are being used.