Vantage Data Centers Announces $6.4 Billion Equity Investment Led by DigitalBridge and Silver Lake

Rhea-AI Summary

Vantage Data Centers (DBRG) announced a $6.4 billion equity investment led by DigitalBridge and Silver Lake, accelerating and extending Vantage’s leadership as strategic partner to global hyperscalers to meet unprecedented cloud and AI demand. The investment supports development investment of over $30 billion to deliver more than three gigawatts of additional data center capacity.

Insights

Financial Analyst

The recent $6.4 billion equity investment in Vantage Data Centers by DigitalBridge Group, Inc. and Silver Lake represents a significant infusion of capital into the data center sector. This move underscores the growing demand for digital infrastructure driven by cloud computing and artificial intelligence (AI). From a financial perspective, this investment could lead to increased revenues and market share for Vantage, given the expected development of over three gigawatts of additional data center capacity.

Investors should note the potential for enhanced economies of scale and operational efficiencies that can arise from such expansions. Moreover, Vantage's strategic land bank, which underpins the $30 billion development plan, could provide a competitive edge in securing future contracts with hyperscalers. However, the capital-intensive nature of data center construction and the long-term return on investment timeline necessitate careful monitoring of Vantage's capital allocation and debt levels.

It's also important to consider the cyclical nature of technology investments and the potential risks associated with the sector's rapid evolution. While the current trajectory appears favorable, shifts in technology or cooling demand for cloud services could impact future profitability.

Market Research Analyst

The strategic partnership between Vantage Data Centers and global hyperscalers is indicative of a larger trend within the data center industry. The sector is experiencing robust growth due to the increasing reliance on cloud services and the integration of AI technologies. Vantage's expansion across North America and EMEA is poised to capitalize on this trend, potentially increasing its market share and influence among hyperscale customers.

Given the company's existing footprint of 32 operational or developing campuses across five continents, the additional investment should further solidify its position as a key player in the market. However, it is crucial to assess the competitive landscape, including the actions of other major players in the industry, as well as any potential regulatory challenges that could arise in different regions.

Furthermore, the sustainability and energy efficiency of new data center designs will likely appeal to environmentally conscious stakeholders, potentially opening up new customer segments and partnerships. The emphasis on sustainable designs aligns with broader industry trends and customer demand for green technology solutions.

Technology Industry Analyst

The investment in Vantage Data Centers reflects the strategic importance of data centers in the current technological landscape, especially as AI and cloud computing become increasingly prevalent. Data centers are the backbone of these technologies and the expansion of capacity is crucial to support the growing data processing and storage needs.

The focus on next-generation data centers, including those purpose-built for AI and cloud deployments, suggests a forward-looking approach that anticipates the future needs of technology customers. Energy-efficient and sustainable designs are not only beneficial for environmental reasons but also can lead to reduced operational costs over time.

As Vantage continues to grow its global footprint, the company's ability to meet the specific infrastructure needs of its technology customers will be a key differentiator. The partnership with DigitalBridge and Silver Lake, both of which have deep technology sector expertise, could provide Vantage with valuable insights and resources to navigate the complex and rapidly evolving digital infrastructure landscape.

Aggregate new equity investment in recent months reaches $8 billion, accelerating and extending Vantage’s leadership as strategic partner to global hyperscalers to meet unprecedented cloud and AI demand

Supports development investment of over $30 billion to deliver more than three gigawatts of additional data center capacity

DENVER & BOCA RATON, Fla. & MENLO PARK, Calif.--(BUSINESS WIRE)-- Vantage Data Centers, a leading global provider of hyperscale data center campuses, today announced a $6.4 billion equity investment led by investment vehicles managed by DigitalBridge Group, Inc. (NYSE: DBRG) (“DigitalBridge”), the leading global alternative asset manager dedicated to investing in digital infrastructure, and Silver Lake, the global leader in technology investing.

Vantage Data Centers’ portfolio includes 32 operational or developing hyperscale data center campuses across five continents. Pictured is a data center on the company’s Phoenix, Arizona campus. (Photo: Business Wire)

The investment, across North America and EMEA, is incremental to the recently announced €1.5 billion to be invested by AustralianSuper in Vantage EMEA and includes expected investment from DigitalBridge and Silver Lake co-investors. These investments accelerate and extend Vantage’s strategic capabilities across North America and EMEA to partner with global hyperscalers in meeting unprecedented cloud and AI demand.

The combined investments highlight the long-term commitment of two category-leading investors to the business. Silver Lake launched Vantage in 2010 as a single data center campus in Santa Clara, California, recruited the management team that continues to lead Vantage today, and grew the company to have the then-largest wholesale data center footprint in Silicon Valley focused on serving sophisticated technology companies. A DigitalBridge-managed vehicle acquired Vantage in 2017 and has been the key strategic partner for nearly seven years, further emphasizing the company’s strategy to support cloud and now AI adoption and scaling Vantage into a global market leader with 32 operational or developing hyperscale data center campuses across five continents.

The new investment from DigitalBridge and Silver Lake, which follows several years of record growth at Vantage, is a key enabler of the business’ strategic growth and investment plan to meet customer demand. Vantage owns or controls 25 sites in North America and EMEA totaling more than three gigawatts of expected capacity. As part of the company’s investment plan, Vantage’s strategic land bank is expected to drive an estimated $30 billion of additional development, extending Vantage's track record of bringing market leading capacity and innovative solutions to customers around the world. In connection with the investment, Vantage will continue its development of next-generation data centers, including energy-efficient and sustainable designs purpose-built for AI and large-scale cloud deployments.

“We are delighted that Silver Lake is joining DigitalBridge to support Vantage’s continued expansion across North America and EMEA,” said Sureel Choksi, president and CEO of Vantage. “Cloud computing, AI and related technologies are driving unprecedented demand for digital infrastructure. The market opportunity in front of us is extraordinary, and we are excited to chart our next phase of growth with two premier investors who have been great partners to us and have an unmatched understanding of our global technology customers and their infrastructure needs.”

“We are excited about supporting the next chapter of Vantage’s growth in partnership with Silver Lake,” said Jon Mauck, senior managing director at DigitalBridge, who leads the company’s data center investment strategy. “We believe the combination of DigitalBridge’s unparalleled insight into the digital infrastructure landscape and Silver Lake’s technology focus creates a unique partnership to further enable Vantage’s strategic expansion and long-term growth plan. Vantage is a critical partner to the leading cloud and technology platforms globally and is well positioned to continue to support accelerating adoption of cloud- and AI-based technologies.”

“We are proud of what we pioneered when we launched Vantage, and we are thrilled to invest and partner again with this exceptional management team alongside DigitalBridge to drive the next generation of energy-efficient, hyperscale data center leadership,” said Greg Mondre, co-CEO and managing partner, and Lee Wittlinger, managing director, of Silver Lake. “Silver Lake is committed to bringing to bear the depth and breadth of our specialized expertise across the technology landscape to strengthen Vantage’s partnerships with the world’s biggest and most sophisticated technology companies and continue to meet their most challenging data center needs.”

The transactions are expected to close in the first quarter of 2024, subject to customary closing conditions.

About Vantage Data Centers

Vantage Data Centers powers, cools, protects and connects the technology of the world’s well-known hyperscalers, cloud providers and large enterprises. Developing and operating across five continents in North America, EMEA and Asia Pacific, Vantage has evolved data center design in innovative ways to deliver dramatic gains in reliability, efficiency and sustainability in flexible environments that can scale as quickly as the market demands.

For more information, visit https://www.vantage-dc.com.

About DigitalBridge Group, Inc.

DigitalBridge Group, Inc. (NYSE: DBRG) is a leading global alternative asset manager dedicated to investing in digital infrastructure. With a heritage of over 25 years investing in and operating businesses across the digital ecosystem, including cell towers, data centers, fiber, small cells and edge infrastructure, the DigitalBridge team manages $75 billion of infrastructure assets on behalf of its limited partners and shareholders. Headquartered in Boca Raton, DigitalBridge has key offices in New York, Los Angeles, London, Luxembourg and Singapore.

For more information, visit https://www.digitalbridge.com.

About Silver Lake

Silver Lake is a global technology investment firm with approximately $101 billion in combined assets under management and committed capital and a team of professionals based in North America, Europe and Asia. Silver Lake’s portfolio companies collectively generate nearly $266 billion of revenue annually and employ approximately 540,000 people globally.

For more information, visit https://www.silverlake.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond our control, and may cause actual results to differ significantly from those expressed in any forward-looking statement. Factors that might cause such a difference include changes to the level of demand for hyperscale data center campuses, the impact of AI and related technologies on the demand for digital infrastructure, plans for capital deployment by Vantage, whether the equity recapitalization transactions described in this release will be completed in the timeframe anticipated or at all, and other risks and uncertainties, including those detailed in DigitalBridge’s Annual Report on Form 10-K for the year ended December 31, 2022, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, and its other reports filed from time to time with the U.S. Securities and Exchange Commission. All forward-looking statements reflect DigitalBridge’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. DigitalBridge cautions investors not to unduly rely on any forward-looking statements. The forward-looking statements speak only as of the date of this press release. DigitalBridge is under no duty to update any of these forward-looking statements after the date of this press release, nor to conform prior statements to actual results or revised expectations, and DigitalBridge does not intend to do so.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240109490842/en/

Mark Freeman

Vantage Data Centers

mfreeman@vantage-dc.com

+1-202-680-4243

Robin Bectel

REQ for Vantage Data Centers

vdc@req.co

+1-202-936-6335

Jon Keehner / Sarah Salky

Joele Frank, Wilkinson Brimmer Katcher for DigitalBridge

dbrg-jf@joelefrank.com

+1-212-355-4449

Matt Benson

Silver Lake

matthew.benson@silverlake.com

+1-212-401-6055

Jennifer Stroud

Edelman Smithfield for Silver Lake

jennifer.stroud@edelmansmithfield.com

+1-646-565-1792

Source: Vantage Data Centers

FAQ

Who announced a $6.4 billion equity investment?

Vantage Data Centers (DBRG) announced a $6.4 billion equity investment led by DigitalBridge and Silver Lake.

What is the investment amount announced?

The investment amount announced is $6.4 billion.

Who led the equity investment?

The equity investment was led by DigitalBridge and Silver Lake.

What is the expected investment from DigitalBridge and Silver Lake co-investors?

The investment is incremental to the recently announced €1.5 billion to be invested by AustralianSuper in Vantage EMEA and includes expected investment from DigitalBridge and Silver Lake co-investors.

How many data center campuses does Vantage Data Centers have?

Vantage Data Centers has 32 operational or developing hyperscale data center campuses across five continents.