Wednesday, October 18, 2017

Vantage Data Centers bought by consortium led by Digital Bridge

Former Digital Realty CEO to join company’s board while current managerial team will keep its positions.

US colocation services provider Vantage Data Centers has become the latest operator to go under a M&A this time by a consortium which includes Digital Bridge Holdings, LLC, Public Sector Pension Investment Board and TIAA Investments.

Financial terms of the transaction have not been disclosed. However, sources in January this year mentioned the deal was expected to top over $1bn.

Vantage will continue to be led by president and CEO Sureel Choksi and the existing management team, each of whom has made an investment in the business alongside the consortium.

In connection with the transaction, Mike Foust, Senior Advisor to Digital Bridge and former CEO of Digital Realty, will join the Vantage board of directors as Chairman, and Raul Martynek of Digital Bridge will also join the board.

Choksi said: “We are thrilled about the opportunities to serve our customers’ future expansion plans going forward.

“We have been fortunate to have had a great partner in Silver Lake, and are excited to partner with Digital Bridge, PSP Investments and TIAA Investments as we enter this exciting new phase of the company’s growth.”

Vantage Data Centers was founded in 2010 in Silicon Valley after the acquisition of an Intel data centre campus in Silicon Valley by Silver Lake.

The company operates four data centres on its flagship 18-acre Santa Clara campus with two more under construction, and a second large-scale campus under development.

The company has built 51 MW of IT load in Santa Clara and has secured expansion capacity totalling 93 MW of IT load.

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

In addition to Santa Clara, Vantage runs a 68-acre data centre campus in Quincy, Washington, including a 6 MW data centre and additional expansion land and power in that market.

Marc Ganzi, co-Founder and CEO of Digital Bridge, said: “This is a unique and special opportunity to invest in a company that has operational excellence, quality customers, and a current lease portfolio with long duration.

“It also has significant expansion capacity in Silicon Valley, perhaps the best data centre market in the U.S.”

Marietta Moshiashvili, Managing Director & Head of Infrastructure Asset Management for TIAA Investments, said: “This communication infrastructure investment represents a growing and attractive asset class within TIAA’s infrastructure portfolio.”

RBC Capital Markets, LLC and DH Capital served as financial advisors, and Simpson, Thacher & Bartlett LLP acted as legal advisor to Vantage in connection with the transaction.

Jones Day acted as lead M&A counsel, Kleinbard LLC acted as investment structure counsel, and Ernst and Young LLP served as accounting advisor to Digital Bridge.

Davies Ward Phillips & Vineberg LLP acted as legal advisor to PSP Investments, and Arnold & Porter Kaye Scholer LLP acted as legal advisor to TIAA Investments.

TD Securities together with CIT Bank, N.A., RBC Capital Markets, and SunTrust Robinson Humphrey provided debt financing commitment for the acquisition.