Swiss private equity firm Partners Group has announced the $1.2 billion acquisition of US datacenter operator EdgeCore Digital Infrastructure.
Partners Group will utilize the investment to purchase a controlling stake in EdgeCore and assist in developing new datacenter locations across the United States, marking the private equity firm’s latest commitment to datacenter assets.
According to Partners Group managing director Ed Diffendal, the firm believes it’s extremely well positioned to benefit from the worldwide increase in data traffic. Cloud computing, machine learning, artificial intelligence, 5G and mobile are among the topics of interest.
A growing presence
Partners Group completed four digital infrastructure investments in 2021, including the acquisition of atNorth, Iceland’s largest datacenter operator.
As investors bet on enterprises transferring their IT infrastructure to contracted providers of cloud-based services, datacenters have become appealing assets for infrastructure investments.
EdgeCore, located in Denver, was led by former CoreSite CEO Tom Ray and has built six datacenters in the United States, comprising locations in Phoenix, Arizona and Silicon Valley.
EdgeCore has serviced major tech firms since its start in 2018. It’s backed by over $800 million in financing from Singapore’s sovereign wealth fund GIC, Canada’s pension fund OPTrust and Mount Elbert Capital Partners.
This trend of acquiring shovel-ready assets has been around for a while, with industry analysts predicting that 2023 will see the largest number of private equity deals in the datacenter sector.
Straits Research estimated the datacenter colocation industry to be worth $50 billion by the end of 2021 and $160 billion by 2030. According to datacenter industry analysts, the privatization of datacenter operators like CyrusOne and QTS may motivate other datacenter operators to go private as well.