Digital Realty Buying Brazilian Data Center Leader Ascenty For $1.8 Billion


Digital Realty is continuing its data center expansion charge with the acquisition of Brazil’s leading data center provider, Ascenty, for $1.8 billion.

Digital Realty, a global provider of data center co-location and interconnection solutions, will leverage Ascenty to boost its position and presence in the growing Latin American market. Founded in 2010, Ascenty is one of Latin America's largest data center providers with 14 data centers in operation or under construction.

"We expect this acquisition will further accelerate our growth while enhancing our ability to support our customers' digital transformation across the globe," said Digital Realty CEO Bill Stein in a statement. "This acquisition advances our strategy of sourcing strategic and complementary assets to strengthen and diversify Digital Realty's data center portfolio and expand our product mix and global footprint."

[Related: Cognizant Acquisition Spree Continues With Deal For Salesforce Specialist Advanced Technology Group]

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Ascenty, currently owned by privately equity firm Great Hill Partners, owns eight data centers strategically located in key Brazilian metro areas including Sao Paulo and Rio de Janeiro, which are built to Tier III standards serving blue chip customers. The Ascenty portfolio is comprised of 106.2 megawatts of total planned capacity and roughly 2,800 miles of a proprietary fiber optic network connecting Brazil's primary technology, finance and population hubs.

The Ascenty acquisition, expected to close in the fourth quarter of this year, is just one of many Digital Realty data center investments over the past two years. The company also said Monday that it has agreed buy 424 acres of undeveloped land in Loudon County, Va., for $236 million with plans to eventually build a new data center. The land is only a few miles away from one of its existing data center campuses in Ashburn, Va.

In 2017, there was approximately $20 billion spent on data center mergers and acquisitions, which far exceeded spending from the two preceding years combined. The majority of the 2017 spending came from Digital Realty and Equinix, which between them spent $19 billion on acquisitions.

The surge of 48 data center consolidation deals in 2017 is being driven by enterprises divesting their own infrastructure as well as cloud services providers looking to rapidly scale into new geographies.

As part of the Ascenty deal, Digital Realty has separately partnered with Brookfield Asset Management with Brookfield committing to fund half of the initial equity investment in exchange for 49 percent of the total equity interests in a joint entity expected to own Ascenty.

"We're delighted to join Digital Realty's global platform and partner with Brookfield to provide our customers access to one of the largest networks of interconnected data centers in the world," said Ascenty CEO Chris Torto in a statement. "Our combined platform will be uniquely positioned to provide our customers the full spectrum of data center solutions along with the ability to support their growth on a global basis."

Ascenty's management team will remain in place and maintain operations in the region.