EQT Infrastructure to Acquire EdgeConneX
- Aug 20, 2020
The EQT Infrastructure IV fund has agreed to acquire EdgeConneX Inc. from an investor group led by Providence Equity Partners, according to EQT Infrastructure, the fund’s parent entity. Financials on the acquisition were not disclosed.
EdgeConneX builds and operates data centers for cloud, content, network and other providers that need both larger purpose-built facilities and edge facilities sited closer to consumer and enterprise users, to support latency-sensitive applications.
EQT Infrastructure stated that it “will support the continued development of EdgeConneX and actively assist the Company in its pursuit of new opportunities to grow in existing and new markets globally.” An EQT spokesperson confirmed to Commercial Property Executive that EdgeConneX CEO Randy Brouckman will remain in that position.
Subject to customary closing conditions, the acquisition is expected to close in the fourth quarter. With this transaction, EQT Infrastructure IV is expected to be 80 to 85 percent invested. Evercore was financial advisor to EdgeConneX, and Simpson Thacher & Bartlett LLP was its legal counsel. Goldman Sachs was financial advisor and Kirkland & Ellis LLP the lead legal counsel to EQT Infrastructure.
Thriving during a plague
EdgeConneX operates more than 40 data centers worldwide, in locations including more than two dozen U.S. metro areas. The company also has substantial presence in South America (Buenos Aires and Santiago) and Europe (Amsterdam, Dublin, Munich and Warsaw).
EdgeConneX went on an expansion tear in 2018, undertaking to more than double the size of its facility in Denver, adding a second edge data center in Atlanta, and partnering with several Argentinian network providers to develop its first edge data center in Buenos Aires.
The European data center market is growing at an unprecedented rate, driven by record increases in absorption, with the FLAP markets (Frankfurt, London, Amsterdam and Paris) among the stars and cloud companies responsible for 80 percent of the absorption, according to a recent CBRE report.
Interviews with several executives from colocation companies highlighted the importance of the sector in keeping economies going during the pandemic. Tenant relationships were expected to fall into two categories: Tenants renewing leases ahead of schedule, versus tenants seeking rent holidays or extended payment terms.