Report: Digital Bridge to ink the industry’s next billion-dollar data center deal
Companies are moving more and more of their applications to the cloud, but physical data centers are still very much in demand.
Reuters reported on Thursday that Digital Bridge Holdings LLC, an investment firm specializing in buying and selling technology infrastructure firms, is looking to acquire Vantage Data Centers Management Co. LLC for “well over” $1 billion. The three unnamed insiders who leaked the news were cited as saying that the deal could finalize in a matter of weeks. The prospective seller on the other end of the talks is Silver Lake Partners LP, which is perhaps best known for taking Dell Inc. private in 2015.
The investment firm’s adventure in the data center market started five years earlier when it bought a Santa Clara, California facility from Intel Corp. and formed Vantage to lead the monetization effort. At the time, Silver Lake said that it intended to expand the 18-acre site into an expansive campus consisting of three buildings with 300,000 square feet of space between them. The firm later acquired another facility in Quincy, Washington, to help Vantage widen its reach.
Silver Lake’s efforts have apparently paid off. When rumors of its plans to sell Vantage surfaced in October, insiders claimed that the firm would only strike a deal for a “satisfactory” price, meaning there’s no rush to find a buyer. This in turn suggests that the transaction is more likely about realizing a return than offloading a struggling business.
If the deal becomes official, Silver Lake will join a growing list of companies that have sold their data center assets in recent quarters. The industry previously saw Verizon Communications Inc. hand over 29 of its facilities to co-location giant Equinix Inc. for $2.9 billion. A few weeks prior, CenturyLink Inc. sold 57 data centers to a Wall Street consortium in a $2.15 billion deal.
Digital Bridge, for its part, will find itself in the middle of a fiercely competitive market should it push through with the acquisition of Vantage. The company will have to fend off not only the likes of Equinix but also cloud providers such as Amazon.com Inc. and Microsoft Corp. that are gaining a lot of ground against traditional data center operators.
Image via Wikimedia
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