Digital Realty completes $1.8bn acquisition of Ascenty
Digital Realty’s Brazilian subsidiary, Stellar Participações, has completed the previously announced acquisition of Ascenty, the leading data centre provider in Brazil, from private equity firm Great Hill Partners in a transaction valued at approximately $1.8 billion.
The strategic transaction, which was first announced in September 2018 , completed in December and establishes the global provider of data centre, colocation and interconnection solutions as the leading data centre provider in Latin America.
"This landmark transaction immediately establishes Digital Realty as the premier data centre provider in the rapidly growing Latin America region, and particularly in Brazil, the hub of Latin America's future technological transformation," said Bill Stein, CEO of Digital Realty.
"This acquisition is a significant extension of our global platform and strengthens our position as the premier global data centre solutions provider."
Digital Realty has separately entered into an independent bilateral equity commitment letter with Brookfield Infrastructure, an affiliate of Brookfield Asset Management, one of the largest owners and operators of infrastructure assets globally, under which Brookfield has committed to fund half of the equity investment, estimated at approximately $613 million, excluding Brookfield's share of the transaction costs, in exchange for 49% of the total equity interests in a joint venture entity expected to ultimately own Ascenty.
Upon consummation of the transaction, Ascenty will enter into a $50 million senior secured first lien revolving credit facility, a senior secured first lien term loan facility of up to $650 million, and a $75 million senior secured first lien delayed draw term loan facility. Citi, ING and Natixis are acting as joint lead arrangers and joint bookrunners on the facilities. ING arranged the first facility back in 2016 before the group of banks expanded in 2017.
BofA Merrill Lynch is serving as Digital Realty's financial advisor and Latham & Watkins LLP is serving as Digital Realty's legal counsel on the pending acquisition. DH Capital is serving as financial advisor and Choate, Hall & Stewart LLP is serving as legal counsel to Ascenty on the pending transaction.
Digital Realty's agreement with Brookfield is subject to certain closing conditions and, along with the permanent capital structure for Ascenty being finalised, is expected to close in the first quarter of 2019.