Digital Bridge Holdings announced today the acquisition of DataBank, Ltd., a leading North American provider of enterprise-class data center solutions including colocation, managed services, as well as cloud and network services. Digital Bridge has partnered with Teachers Insurance and Annuity Association of America, Allstate Investments and The Edgewater Funds in the acquisition. Financial terms of the transaction were not disclosed.
The acquisition is the latest sign of consolidation in the data center sector, as the continuing demand for data and video is fueling a revival in fiber optic services and data storage.
It is also the first major acquisition by Digital Bridge outside of its normal cell tower, rooftop and DAS operations.
“As part of our broader communications infrastructure strategy, we have assembled a team of senior executives with significant experience in the data center sector,” said Marc Ganzi, Founder and Chief Executive Officer of Digital Bridge. “DataBank has a premier brand and reputation. We are excited to have them as part of our portfolio, and to create a platform for growth and further industry consolidation.”
“Our ambitions are bigger than this acquisition,” Ganzi said in an interview with Reuters. “This is a great launching pad to do more investments in data centers.”
DataBank is headquartered in the historic former Federal Reserve Bank Building in downtown Dallas, Tex, where it operates one of the major network interconnect facilities in the region. The company has six data centers located in downtown Dallas, North Dallas, Minneapolis and Kansas City. DataBank’s footprint and top-tier facilities are dedicated to providing uninterrupted access to customer data, applications, and IT equipment. DataBank’s suite of managed services provides business solutions for corporate enterprises including hybrid cloud services, customized IT deployments, and industry compliant regulations to meet the outsourcing needs for IT management, maintenance and operations. The company serves a wide range of customer verticals including media and content distribution, cloud infrastructure providers, and telecom networks in addition to corporate enterprises.
“Digital Bridge is an ideal partner,” said Tim Moore, the CEO of DataBank, in a statement. “They bring deep expertise in communications infrastructure, and the capital to support expansion in both our existing markets and new geographies. We see significant demand from current and potential customers, and believe that this transaction positions DataBank to capture those opportunities and accelerate our growth. We would like to thank Avista Capital for being a tremendous partner over the past five years. Avista’s perspective and resources helped shape the company and position DataBank to realize the many opportunities ahead of us.”
Digital Bridge, based in Boca Raton, Fla., was formed in 2013 through a partnership between Ben Jenkins, formerly of The Blackstone Group, and Ganzi, formerly founder and CEO of Global Tower Partners. Digital Bridge is a leader in the acquisition, funding and management of companies in the communications infrastructure sector. Digital Bridge has an experienced team of senior executives with more than 90 years of combined data center industry experience to support DataBank’s management team, and help multiply this investment organically and through acquisitions.
“I am excited to join the Board of DataBank and to collaborate with this talented management team,” said Michael Foust, Founder and former CEO of Digital Realty Trust, who will serve as Chairman of the Board of Directors. “We believe DataBank has substantial capacity to grow in its existing footprint, and is well positioned to grow through the acquisition of colocation businesses and strategic developments.” Jon Mauck, former Chief Financial Officer of IO Data Centers, will also be joining the Board and serving as Chief Investment Officer to support acquisitions, expansion and strategic transactions.
Robert Girardi, a Partner at Avista Capital Partners added, “It has been a pleasure partnering with DataBank’s management team over the last five years. We are incredibly proud of the company’s growth and performance since Avista’s investment in June 2011. DataBank is now well-positioned to capitalize on future opportunities and we wish them continued success.”
D.H. Capital served as the exclusive financial advisor, and Kirkland & Ellis LLP acted as the legal advisor to DataBank in connection with the transaction. Jones Day acted as lead M&A counsel, Kleinbard acted as investment structure counsel, and Ernst and Young served as accounting advisor to Digital Bridge. SunTrust Robinson Humphrey, Inc., together with CIT Bank N.A., TD Securities (USA) LLC and AB Private Credit Investors LLC, has provided the debt financing commitment for the acquisition.