Digital Realty to buy Teraco at valuation of R56 billion
Update: Digital Realty, the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, announced today it has entered into a definitive agreement to acquire a majority stake in Teraco, Africa’s leading carrier-neutral colocation provider, from a consortium of investors, including Berkshire Partners and Permira, in a transaction valuing Teraco at approximately $3.5 billion (R56 billion).
Digital Realty Trust is in advanced talks to acquire Teraco Data Environments, Africa’s largest data-centre operator, from private equity owners Permira and Berkshire Partners, according to people with knowledge of the matter.
A transaction may value Johannesburg-based Teraco at more than $3 billion (R48 billion), including debt, said some of the people, all of whom requested anonymity discussing talks that are private. A deal, if finalized, may be announced in the coming weeks.
A Digital Realty spokesperson declined to comment. Representatives for Permira, Berkshire and Teraco didn’t immediately respond to requests for comment.
Digital Realty, a San Francisco-based real estate investment trust led by Chief Executive Officer Bill Stein, has a market value of about $51 billion. It competes with other digital infrastructure REITs including Equinix Inc. and American Tower Corp., which in November struck a deal to buy data center operator CoreSite Realty Corp.
The sector is consolidating. CyrusOne Inc. and QTS Realty Trust both agreed to be taken private in 2021. In 2020, Digital Realty completed the roughly $7 billion acquisition of InterXion, its biggest deal on record, according to data compiled by Bloomberg.
Permira first agreed to invest in Teraco in 2014. Berkshire in 2019 became the largest shareholder in Teraco after acquiring a stake from Permira.
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