Digital Realty acquires majority stake in data centre provider Teraco

SOUTH AFRICADigital Realty, the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, has completed its previously announced acquisition of a majority interest in Teraco, a data centre provider in South Africa.

Digital Realty has acquired Teraco from a consortium of investors, including Berkshire Partners and Permira, that values Teraco at approximately US$3.5 billion. The company will now be known as Teraco: A Digital Realty Company.

“We are very excited to complete this transformative transaction that positions Digital Realty as the premier data centre and connectivity provider on the high-growth African continent,” said A. William Stein, chief executive officer, Digital Realty.

“Today’s milestone gives us significant regional scale and access to a premier, high-quality portfolio in Africa’s largest market, enhancing our ability to serve growing customer demand for connectivity in the region.

“We’re thrilled to strengthen our global platform and deepen our commitment to investment in Africa, as we capitalise on the tremendous opportunity in the region.”

Teraco now adds South Africa to Digital Realty’s three existing markets in Africa including Kenya, Mozambique, and Nigeria.

With a number of new subsea cable networks encircling the continent, combined with Digital Realty’s facilities in Marseille, will give customers a range of connectivity hubs from which to serve the African market.

It was further stated that Digital Realty would own approximately 55% of the total equity interests in Teraco, while the remaining 45% would be held by a consortium of existing shareholders, including management, Berkshire Partners, Permira, Van Rooyen Group, Columbia Capital, Stepstone Ventures and the Teraco Connect Trust.

Furthermore, the Teraco management team would remain in place and maintain day-to-day responsibility for operations in the country.

Teraco has made significant progress in achieving our strategic objectives, including improving the connectivity and accessibility of our data centres, in supporting the rapid digital transformation in the region,” said Jan Hnizdo, chief executive officer, Teraco.

Africa is poised to remain a high growth, high-demand area for data centre solutions and our combined, diversified platform will further enable us to support our customers in the pan-Africa region and around the world.”

At the start of 2021, Teraco pledged R2.5-billion (US$152 million) towards efforts to build Africa’s largest data centre facility in South Africa.

In August last year, the firm completed construction on a massive hyperscale data centre campus in the East of Johannesburg.

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