Teraco Data Environments, a carrier-neutral data centre and interconnection solutions provider in Africa, has announced that Digital Realty, the largest global provider of cloud and carrier-neutral data centre, colocation and interconnection solutions, has entered into a definitive agreement to acquire a majority stake in Teraco from a consortium of investors, including Berkshire Partners and Permira.
Based in Johannesburg, South Africa, and established in 2008, 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 firm 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, allowing clients to connect directly to each other, to the onramps of all major cloud providers, as well as to the continent’s largest and fastest-growing Internet Exchange Point, NAPAfrica.
(TOP: Jan Hnizdo, the Teraco CEO),
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 Jan Hnizdo, the Teraco CEO. “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.”
A. William Stein, the Digital Realty CEO, added: “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.”
The Teraco management team will remain in place and maintain day-to-day responsibility for operations in South Africa. The Teraco management team is led by CEO Jan Hnizdo, a long-time team member who has helped drive Teraco’s significant growth over the last decade. Hnizdo is supported by an experienced and highly qualified local management team with over 100 years of combined experience. In addition, Teraco’s existing investors, including several leading global digital infrastructure investors with significant experience investing in Africa, are rolling forward a significant portion of their equity interests, demonstrating their conviction in Teraco’s future growth prospects. The continuing involvement of management and the existing investors is consistent with Digital Realty’s new market entry strategy of partnering with strong local management teams and experienced regional capital partners.
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, 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. Goldman Sachs is acting as financial advisor to Teraco and Weil, Gotshal & Manges and ENSafrica are serving as legal advisors to Teraco. Solomon Partners is acting as financial advisors, and Latham & Watkins and Bowmans are acting as legal advisors to Digital Realty.
Teraco provides carrier and cloud-neutral colocation data centres, and with over 22,000 cross-connects, it is Africa’s most interconnected data centre 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 centre 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. Discovering new business partners, making strategic interconnection choices, on-ramping to the customer’s choice of clouds, and reaching new markets globally – Teraco provides a highly secure, flexible and resilient home for digital organisations the world over. Purpose-built and operated to global best practice by an expert organisation with an absolute focus on data centre technology and infrastructure, Teraco offers all its clients secure, cost-effective, sustainable, scalable and resilient data centre services through its Johannesburg, Durban and Cape Town facilities.
Digital Realty supports global 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.