CLOUDNews

Digital Realty to acquire majority stake in South African data centre company Teraco

Bloomberg reports that a transaction values the Johannesburg-based Teraco at about $3.5 billion

Story Highlights
  • Digital Realty has agreed to acquire a majority stake in Teraco Data Environments Pty, Africa’s largest data-center operator
  • Digital Reality is the largest global provider of cloud and carrier-neutral data centre, colocation and interconnection solutions
  • Bloomberg reports that a transaction values the Johannesburg-based Teraco at about $3.5 billion

Digital Realty has entered into a definitive agreement to acquire a majority stake in Teraco Data Environments Pty, Africa’s largest data-center operator, from a consortium of investors, including Berkshire Partners and Permira.

Bloomberg reports that a transaction values the Johannesburg-based Teraco at about $3.5 billion

The Digital Realty transaction will result in a powerful combination providing Teraco continued access to capital to grow. The Teraco and NAPAfrica brands, which have a global reputation for exceptional service, quality, and client focus, will continue. Being backed by a global leader will enable Teraco to access skills and knowledge from the Digital Realty global platform and continue to grow the Teraco ecosystem.

“We are excited to enter our next chapter by joining forces with Digital Realty to create a truly global, scaled platform serving our customers in Africa and beyond,” said Teraco Chief Executive Officer Jan Hnizdo. “Our combined platform will be uniquely positioned to serve the full customer spectrum with the ability to support their growth around the world.  We look forward to working with the Digital Realty team to extend our state-of-the-art data centre and connectivity solutions to capitalise on the favourable industry trends and tremendous market opportunity.”

After closing, Digital Realty will own approximately 55% of the total equity interests in Teraco, while the remaining 45% will be held by a consortium of existing shareholders, including management, Berkshire Partners LLC, Permira, van Rooyen Group, Columbia Capital, Stepstone Ventures and the Teraco Connect Trust.

The transaction is expected to close in the first half of 2022 and is subject to customary closing conditions.

“This highly strategic transaction immediately cements Digital Realty as the leading colocation provider in Africa, a region experiencing rapid digital transformation. Teraco is the industry leader in South Africa and the continent’s connectivity hub.  This investment will enhance our ability to serve customers on a global basis by adding significant regional scale with a premier, network-dense portfolio in South Africa’s most strategically important metro areas.  Teraco will also advance our strategy of increasing exposure to highly connected, network- and carrier-dense facilities to enhance our global coverage and connectivity capabilities.” Digital Realty Chief Executive Officer A. William Stein said.

The Teraco management team will remain in place and maintain day-to-day responsibility for operations in South Africa.

Teraco is Africa’s largest data centre services provider. The company offers vendor-neutral colocation and other related services in secure and resilient data centres. The company operates seven high-quality facilities with 75 megawatts of critical power load, serving more than 600 clients, including global Internet companies, across six core ecosystems – connectivity providers, managed service providers, cloud, content, enterprise and financial services. With more than 22,000 interconnects, Teraco’s data centres are the most interconnected facilities in Africa.

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Nixon Kanali

Tech journalist based in Nairobi. I track and report on tech, business and African startups. Founder and Editor For TechTrendsKE. Nixon is also the East African tech editor for Africa Business Communities. Send tips to nkanali@techtrendske.co.ke.

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