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Berkshire Partners and Permira to Sell Majority Stake in Teraco Data Environments to Digital Realty
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Very Positive)
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Rhea-AI Summary
Digital Realty has signed an agreement to acquire the majority stakes in Teraco Data Environments, Africa's largest carrier-neutral data center provider, from Berkshire Partners and Permira. Both firms will retain minority ownership in Teraco, which operates seven state-of-the-art facilities across Johannesburg, Cape Town, and Durban. The transaction, subject to South African regulatory approval, is expected to close in the first half of 2022. This acquisition positions Digital Realty to enhance its presence in the fast-growing Sub-Saharan African data center market.
Positive
Digital Realty expands its footprint in Sub-Saharan Africa, tapping into a growing data center market.
Teraco plays a vital role in Africa's digital infrastructure with over 600 clients and multiple data centers.
Negative
None.
Both Firms to Retain Minority Ownership in Leading Provider of Carrier-Neutral Data Center Services in Sub-Saharan Africa
BOSTON & LONDON--(BUSINESS WIRE)--
Berkshire Partners, a Boston-based global investment firm, and Permira, a growth-focused global private equity firm, today announced that they have signed a definitive agreement with Digital Realty (NYSE: DLR), a leading global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, for Digital Realty to acquire a majority of their respective stakes in Teraco Data Environments (“Teraco” or the “Company”), Africa’s largest carrier-neutral data center and interconnection services provider.
Both Berkshire Partners and the Permira funds, as well as existing investor van Rooyen Group, will retain minority equity interests in the Company. Teraco’s current management team, including Chief Executive Officer Jan Hnizdo, will continue to lead the Company and will remain significant investors in the business.
Teraco’s leading interconnection-rich facilities provide secure colocation and other related services to more than 600 carrier, cloud, content, and enterprise clients. Founded in 2008, the Company operates seven state-of-the-art data centers in Johannesburg, Cape Town, and Durban. With its world-class data center infrastructure and network dense ecosystems, Teraco forms a vital part of the African internet’s backbone and is an essential part of the modern enterprise’s digital transformation and cloud strategy.
"It has been a privilege to partner with Jan and his team at Teraco,” said Drew Walker, a Principal at Berkshire Partners. “Teraco has delivered exceptional growth during these first few years of our investment, leveraging its interconnected ecosystems, ongoing investments in expansion capacity, and track record of stellar execution to strengthen its leadership position in the fast-growing Sub-Saharan African data center market. As investors in digital infrastructure businesses for nearly a quarter of a century, we’re thrilled to continue our partnership with Teraco alongside Digital Realty, who will bring significant expertise and resources to the Teraco platform.”
“Over the last seven years, Teraco has transformed itself into one of the most unique data center platforms globally. Today, Teraco combines the very rare characteristics of offering an interconnection-rich ecosystem, being Africa’s home to the Cloud, while also owning the African Internet Exchange, Napafrica. Jan and his team should be very proud of what they have achieved,” said Pierre Pozzo, a Principal at Permira. “It has been a pleasure to support the Company since our original investment in 2015, during which time earnings have multiplied by nearly 20x organically. We look forward to partnering with Digital Realty to further accelerate Sub-Saharan Africa’s digital transformation powered by Teraco.”
“It has been a pleasure partnering with Berkshire, Permira, and the Teraco management team, and I look forward to continuing our relationship,” said Grant van Rooyen, President of van Rooyen Group. “As a South African, it has been satisfying to invest in the region’s digital infrastructure capabilities, and I remain enthusiastic about the opportunities for both Teraco and Sub-Saharan Africa as the Company continues to effectively serve its domestic and international customers.”
“As we take this next step in the evolution of Teraco, we are pleased to be joining forces with a strategic partner in Digital Realty and are equally as excited to continue our relationships with Berkshire and Permira,” said Jan Hnizdo, Chief Executive Officer of Teraco. “Digital infrastructure continues to be at the forefront for many companies in a variety of industries and geographies and we are excited to continue to partner with the Berkshire and Permira teams who have valuable expertise that has significantly contributed to our growth and success over the past several years.”
The transaction, which is subject to customary South African regulatory approvals, is expected to close in the first half of 2022.
About Berkshire Partners
Berkshire Partners, a Boston-based firm, has more than 35 years of investment history. Berkshire Private Equity has made more than 145 private equity investments since its inception and has a strong history of partnering with management teams to grow the companies in which it invests. Example communications and digital infrastructure investments include Comlinkdata, Crown Castle, Lightower, Telx, and Torres Unidas. The firm also invests in technology, consumer, healthcare, and services and industrials companies. For additional information, and to see a full list of the firm’s private equity investments, visit www.berkshirepartners.com.
About Permira
Permira is a global investment firm that backs successful businesses with growth ambitions. Founded in 1985, the firm advises funds with assets under management of approximately US$65bn (€58bn) and makes long-term majority and minority investments. The Permira funds have made approximately 300 private equity investments in four key sectors: Technology, Consumer, Services and Healthcare. The Permira funds have an extensive track record in tech investing, having invested US $18.7 billion in 67 companies across enterprise cloud adoption, SaaS, fintech and online marketplaces. Permira employs over 350 people in 15 offices across Europe, North America, and Asia.
About Teraco Data Environments
Teraco provides carrier and cloud-neutral colocation data centers, and with over 22 000 cross-connects, it is Africa’s most interconnected data center hub. As the first provider of highly resilient, vendor-neutral data environments in sub-Saharan Africa, Teraco brings global content closer to the digital edge. With its world-class data center infrastructure and network-dense ecosystems, Teraco forms a vital part of the African Internet’s backbone and is essential to the modern enterprise’s digital transformation strategy. Its ever-expanding ecosystems move Teraco beyond colocation and firmly establish it as an open marketplace for digital growth and innovation. Discovering new business partners, making strategic interconnection choices, on-ramping to customer’s choice of cloud, and reaching new markets globally – Teraco provides a highly secure, flexible and resilient home for digital organizations the world over. Purpose-built and operated to global best practice by an expert organization with an absolute focus on data center technology and infrastructure, Teraco offers all its clients secure, cost-effective, sustainable, scalable and resilient data center services through its Johannesburg, Durban and Cape Town facilities. For more information about Teraco Data Environments, visit teraco.co.za.
About Digital Realty
Digital Realty supports the world’s leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITAL®, the company’s global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture (PDx™) solution methodology for scaling digital business and efficiently managing data gravity challenges. Digital Realty’s global data center footprint gives customers access to the connected communities that matter to them with more than 280 facilities in 48 metros across 24 countries on six continents. For more information, please visit digitalrealty.com or follow us on LinkedIn and Twitter.
