Digital Realty Adds Brazilian Depth with Purchase of Ascenty

September 24th, 2018 by · 2 Comments

Of the data center markets in Latin America, Brazil certainly does get its share and then some of the global M&A attention. Today Digital Realty announced an agreement to acquire Ascenty from the private equity group Great Hill Partners, turning a rumor from July into reality.

Ascenty operates eight data centers across the key Brazilian markets of São Paulo, Campinas, Rio de Janeiro and Fortaleza, and serves the global hyperscale community. The portfolio has 39.2MW of capacity in place, with 34MW more on the way and 33MW possible if needed. The company also has a 4,500km fiber network hooking up its markets, enabling it to provide connectivity both between its data centers and to the various subsea cables that land nearby.

The deal is valued at $1.8B in total, and is being done in with the help of Brookfield Asset Management, which is funding half of the initial equity investment of $613M. Brookfield will own 49% of the joint venture when the deal is done. Also on the menu is another $425M of capex for data center space currently or soon to be under construction.  Further details will probably come out over time.

Digital Realty also followed through on recent talk of its acquisition of Dulles’ Western Lands. They formally announced an agreement today to acquire the 424 acres for $236.5M, giving them yet more space in northern Virginia to build upon.

To help fund all this, Digital Realty also announced a common stock offering this morning. The data center REIT plans to sell 8.5M of stock, plus 15% if the underwriters drum up the demand for it. While that offering will probably evolve over the next week or two, it would raise something around $1B for the company as currently envisioned.

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Categories: Datacenter · Mergers and Acquisitions

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2 Comments So Far

  • John Danko says:

    you talk of MW constantly, but what about Customers? is anyone else worried?

    • Anonymous says:

      No, not really. With hyperscaler customers you can generally calculate revenue/margin per MW with some accuracy and thereby the maximum potential yield from a facility or estate (and, additionally, its attractiveness to hyperscalers). In that context customer numbers are not particularly relevant, although power costs and PUE are.

      Customer numbers are relevant in ecosystem buildings, which these don’t appear to be.

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