What is the Teraco Acquisition and its significance for Digital Realty?

The Teraco Acquisition involves Digital Realty acquiring a majority stake (55%) in Teraco Investments, which is the largest carrier-neutral data center and interconnection services provider in Africa. This is significant as it immediately positions Digital Realty as the leading data center provider on the high-growth African continent, expanding its global footprint into a key emerging market.

What is the financial impact of the Teraco Acquisition on Digital Realty?

Digital Realty expects the Teraco Acquisition to be approximately 1% dilutive to its core FFO per share in 2022, breakeven in 2023, and accretive to financial metrics and the company's growth trajectory thereafter. The enterprise value of Teraco Investments is approximately $3.5 billion, with Digital Realty's cash consideration estimated at $1.7 billion.

How will Digital Realty finance the Teraco Acquisition?

The acquisition is planned to be financed through a combination of proceeds from Digital Realty's private capital activities, capital recycling efforts, committed funds under an existing equity forward commitment, and other potential future financings.

What are the key assets and capabilities of Teraco Investments?

Teraco Investments is Africa's largest carrier-neutral data center provider, with a portfolio of seven data centers across Johannesburg, Cape Town, and Durban in South Africa. It has 187 megawatts of total planned capacity, with 75 MW currently in-service, and serves over 600 customers, including more than 275 connectivity providers, over 25 cloud and content platforms, and approximately 300 enterprises.

DIGITAL REALTY TRUST, INC. 8-K: Regulation FD

Summary

Digital Realty Trust, Inc. (DLR) has announced a significant strategic move with the pending acquisition of a majority stake in Teraco Investments, a leading carrier-neutral data center and interconnection services provider in Africa. This acquisition, valued at approximately $3.5 billion for the enterprise, will see Digital Realty's subsidiary, Digital Titan, acquire a 55% interest. The deal is expected to immediately establish Digital Realty as the premier data center operator on the African continent, leveraging Teraco's extensive infrastructure and customer base in key South African markets. The company anticipates the Teraco Acquisition to be slightly dilutive to core FFO per share in 2022, breakeven in 2023, and accretive thereafter. The financing for this substantial investment will be a combination of private capital, capital recycling, and existing equity forward commitments. This move underscores Digital Realty's commitment to expanding its global footprint in high-growth markets and strengthening its position in the rapidly evolving data center industry.

Key Highlights

1Digital Realty is acquiring a majority stake (55%) in Teraco Investments, Africa's largest carrier-neutral data center provider.
2The Teraco Acquisition is valued at an enterprise value of approximately $3.5 billion, with Digital Realty's consideration estimated at $1.7 billion.
3Teraco operates a significant platform in South Africa, with seven data centers, 187 megawatts of planned capacity (75 MW in-service), and over 600 customers, including major connectivity providers and cloud platforms.
4The transaction is expected to be approximately 1% dilutive to Digital Realty's core FFO per share in 2022 and breakeven in 2023, with future accretion anticipated.
5Financing will be sourced from private capital, capital recycling, and existing equity forward commitments.
6This acquisition is strategically positioned to make Digital Realty the leading data center provider in the high-growth African market.
7The deal is subject to customary closing conditions.

DIGITAL REALTY TRUST, INC. 8-K Report, Regulation FD Disclosure (Jan 3, 2022)

Summary

Key Highlights

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