Hexatronic enters US data centre market through acquisition

24 September 2021 | Saf Malik

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Swedish fibre player Hexatronic has signed an agreement to acquire 100% of the shares of Data Centre Systems (DCS) in the US.

DCS is expected to generate an EBITDA of around US$3 million in 2021, including a tax benefit of approximately $2.5 million resulting from the transaction. The total effective enterprise value will be $17.2 million up to $19.9 million including the performance-based consideration.

Henrik Larsson Lyon (pictured), CEO of Hexatronic Group, said: “With DCS, Hexatronic enters the US market for data centres that sare expected to experience continued growth.

"Ever-increasing data traffic as well as the trend towards edge computing increase the need for both larger hyperscale data centres as well as small and mid-sized data centres closer to the edge."

The news follows an acquisition drive on the part of Hexatronic over recent months.

In July and August the company acquired Australia's Optical Solutions Group and The Fibre Optic Shop; duct and tube manufacturer Weterings in the Netherlands; and Rehau Group, one of the main players in the German microduct market.

This deal, however, marks Hexatronic's first foray into the US data centre space.

The DCS acquisition will be financed by a senior bank loan from Danske Bank and is subject to customary closing conditions. Once these are completed, the deal could close as early as next month.

DCS said its current owner Kevin Ehringer will remain as CEO after the completion of the deal. He said: “Joining the Hexatronic Group is a huge step towards DCS fulfilling our vision to be the worldwide leader of storage and network connectivity for large enterprise-class data centres.”

In project news, in July Hexatronic confirmed it would supply the high-fibre-count cable for the Zeus subsea system, delivering a "high-capacity 192 fibre, 100% double armoured cable with increased crush resistance and ULL fibre technology for added resiliency". The firm also supplied the cable for Crosslake Fibre's new system crossing the English Channel.

Last month, Hexatronic's US division signed a $50 million partnership with Ting Internet to supply micro ducts, blown fiber, micro cables, blowing tools and accessories for Ting’s fibre-to-the-home (FTTH) build out across the US. Announcing that news, Hexatronic said the US is "one of our three strategic growth markets".