Digital Realty Trust to acquire Teraco for approx. $3.5 bln
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DLR has entered into a definite agreement to acquired a majority stake in Teraco from multiple investors in a transaction valuing Teraco at approximately $3.5 bln.
- Teraco is the largest and most densely interconnected data center platform in Africa, with seven state-of-the-art facilities strategically located in the key South African metros of Johannesburg, Cape Town and Durban, serving over 600 customers, including more than 275 connectivity providers, over 25 cloud and content platforms and approximately 300 enterprises.
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The transaction values Teraco at approximately $3.5 bln, representing a cap rate of approximately 3.5% on projected 2022 cash net operating income of approximately $121 mln.
- Teraco has historically generated double-digit growth in key financial metrics, including revenue, EBITDA and participants on its platform.
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After closing, DLR will own approximately 55% of the total equity interests in Teraco, while the remaining 45% will be held by a consortium of existing investors.
- The transaction is expected to be approximately 1% dilutive to DLR's core FFO per share in 2022, breakeven in 2023, and accretive to financial metrics and the growth trajectory of the combined organization thereafter.
- The investment will be financed through a combination of proceeds from DLR's private capital and capital recycling initiatives.
- The transaction is expected to close in the first half of 2022.