Berkshire Partners and Permira to Sell Majority Stake in Teraco Data Environments to Digital Realty

Berkshire Partners, a Boston-based global investment firm, and Permira, a growth-focused global private equity firm, today announced that they have signed a definitive agreement with Digital Realty (NYSE: DLR), a leading global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions, for Digital Realty to acquire a majority of their respective stakes in Teraco Data Environments (“Teraco” or the “Company”), Africa’s largest carrier-neutral data center and interconnection services provider.

Both Berkshire Partners and the Permira funds, as well as existing investor van Rooyen Group, will retain minority equity interests in the Company. Teraco’s current management team, including Chief Executive Officer Jan Hnizdo, will continue to lead the Company and will remain significant investors in the business.

Teraco’s leading interconnection-rich facilities provide secure colocation and other related services to more than 600 carrier, cloud, content, and enterprise clients. Founded in 2008, the Company operates seven state-of-the-art data centers in Johannesburg, Cape Town, and Durban. With its world-class data center infrastructure and network dense ecosystems, Teraco forms a vital part of the African internet’s backbone and is an essential part of the modern enterprise’s digital transformation and cloud strategy.

"It has been a privilege to partner with Jan and his team at Teraco,” said Drew Walker, a Principal at Berkshire Partners. “Teraco has delivered exceptional growth during these first few years of our investment, leveraging its interconnected ecosystems, ongoing investments in expansion capacity, and track record of stellar execution to strengthen its leadership position in the fast-growing Sub-Saharan African data center market. As investors in digital infrastructure businesses for nearly a quarter of a century, we’re thrilled to continue our partnership with Teraco alongside Digital Realty, who will bring significant expertise and resources to the Teraco platform.”

“Over the last seven years, Teraco has transformed itself into one of the most unique data center platforms globally. Today, Teraco combines the very rare characteristics of offering an interconnection-rich ecosystem, being Africa’s home to the Cloud, while also owning the African Internet Exchange, Napafrica. Jan and his team should be very proud of what they have achieved,” said Pierre Pozzo, a Principal at Permira. “It has been a pleasure to support the Company since our original investment in 2015, during which time earnings have multiplied by nearly 20x organically. We look forward to partnering with Digital Realty to further accelerate Sub-Saharan Africa’s digital transformation powered by Teraco.”

“It has been a pleasure partnering with Berkshire, Permira, and the Teraco management team, and I look forward to continuing our relationship,” said Grant van Rooyen, President of van Rooyen Group. “As a South African, it has been satisfying to invest in the region’s digital infrastructure capabilities, and I remain enthusiastic about the opportunities for both Teraco and Sub-Saharan Africa as the Company continues to effectively serve its domestic and international customers.”

“As we take this next step in the evolution of Teraco, we are pleased to be joining forces with a strategic partner in Digital Realty and are equally as excited to continue our relationships with Berkshire and Permira,” said Jan Hnizdo, Chief Executive Officer of Teraco. “Digital infrastructure continues to be at the forefront for many companies in a variety of industries and geographies and we are excited to continue to partner with the Berkshire and Permira teams who have valuable expertise that has significantly contributed to our growth and success over the past several years.”

The transaction, which is subject to customary South African regulatory approvals, is expected to close in the first half of 2022.