Teraco said to be for sale with Permira seeking exit

Permira is working with an adviser to find a buyer for its data centre company, Teraco Data Environments, people with knowledge of the matter said.

The Johannesburg-based company, Africa’s largest data centre operator, could fetch anywhere from US$600-million to $1-billion (R8.6-billion R14.3-billion) and including debt in a sale, said three of the people, who asked not to be identified because the information is private.

No decisions have been made and the London-based private equity firm may elect to keep Teraco, the people said.

Representatives for Permira and Teraco declined to comment.

The company could attract interest from private equity and industry-focused investors including General Atlantic and Digital Bridge Holdings, as well as other data centre owners, the people said. General Atlantic and Digital Bridge declined to comment.

In addition to Johannesburg, Teraco also operates data centres in Cape Town and Durban. Permira backed a management buyout of the company in 2015, according to the firm’s website. Teraco’s clients include China Telecom Global and Amazon Web Services, its website shows.

Institutional investors have been drawn to data centres, partly because technology is increasingly more integral to consumers and businesses. Demand for associated data storage and services is seen as protecting the industry from a potential cyclical downturn.

Brookfield Asset Management’s infrastructure arm agreed in June to buy data centre operations from AT&T. In September, Brookfield backed Digital Realty Trust’s purchase of Brazilian data centre provider Ascenty in a deal valued at about $1.8-billion.  — Reported by Gillian Tan, Kiel Porter and Loni Prinsloo, (c) 2018 Bloomberg LP