Cordiant Digital Infrastructure Expands its Portfolio
Cordiant Digital Infrastructure Limited (CORD), a prominent digital infrastructure investment firm, is making significant strides in the market by acquiring substantial interests in two Belgian data centre entities. This collaborative effort with TINC NV and another Cordiant-managed fund will involve a strategic acquisition valued at €92.3 million, which includes a 47.5% economic stake in DCU Invest NV, commonly known as Datacenter United (DCU), alongside Proximus Group's data centre operations.
Details of the Acquisition
DCU, recognized as a Tier III/IV data centre operator, boasts nine locations throughout Belgium. The acquisition is a noteworthy collaboration with TINC and DCU's CEO, Friso Haringsma, from whom shares are being acquired. With an enterprise value assigned to DCU at €72.5 million, this transaction is set to bolster CORD's presence in the growing data infrastructure landscape. Post-acquisition, TINC will maintain a comparable stake, while Haringsma will retain a 5% non-voting interest.
Funding and Expansion Plans
The capital generated from this acquisition will primarily facilitate DCU’s purchase of Proximus Group's data centre operations, which is valued at €128 million. The synergy created by this merger is anticipated to enhance the operational efficiency of both entities, resulting in the formation of a new group collectively referred to as the Combined Group.
Combined Group Financial Outlook
The newly formed Combined Group will exhibit impressive capabilities, showcasing a pro forma IT power capacity set at 13MW. Furthermore, they project revenues of about €40.3 million and an EBITDA of approximately €15.1 million for the year ahead. With the potential to increase its capacity by an additional 11.1MW, the future growth prospects appear promising.
Long-term Partnership with Proximus
As part of the strategic alignment, Proximus Group has entered into a long-term master services agreement with the Combined Group. Under this agreement, Proximus will leverage 37% of the IT power capacity offered by the Combined Group, ensuring stable demand and operational continuity. Currently, the group boasts about 80% capacity utilization, providing services to a diverse array of esteemed corporate and government clients.
Regulatory Approvals and Future Prospects
The acquisitions remain subject to regulatory approvals, with expectations to conclude in the early part of the first quarter of 2025. Financing of Cordiant's investment is set to be accomplished through Eurobond facilities initiated in June 2024, marking a strategic financial move for the company.
Projected Gearing and EBITDA Growth
Post-transaction projections indicate a net gearing ratio of 42.1%, paired with an expected aggregate annual EBITDA, including the share in the Combined Group, reaching £138.7 million. This financial structuring underlines the robust planning and foresight exercised by Cordiant in expanding its operations.
Positive Outlook from Leadership
Shonaid Jemmett-Page, Chairman of Cordiant, has expressed considerable enthusiasm regarding the establishment of a market-leading data centre enterprise in Belgium. She anticipates substantial growth in both EBITDA and NAV as a consequence of this strategic acquisition. Additionally, Steven Marshall and Benn Mikula from Cordiant Digital Infrastructure Management accentuated the strategic alignment with TINC, viewing this transaction as a testament to Cordiant's operational prowess in the data centre sector.
Frequently Asked Questions
What is Cordiant Digital Infrastructure's latest acquisition about?
Cordiant Digital Infrastructure is acquiring stakes in two Belgian data centre businesses to enhance its operational capabilities.
How much is the acquisition valued at?
The total equity consideration for the acquisition is €92.3 million.
What are the expected financial impacts of this acquisition?
The Combined Group is projected to generate revenues of €40.3 million and an EBITDA of €15.1 million for 2023.
What is the significance of the Proximus Group agreement?
The long-term master services agreement with Proximus ensures they will use 37% of the group's IT capacity, promoting sustained operational demand.
When is the acquisition expected to be finalized?
The acquisition is subject to regulatory approvals and is anticipated to conclude in early 2025.
