Existing shareholder Permira will "remain a significant investor" in the company once the deal has closed, which is expected before the end of March. The value of Berkshire Partners' investment was not made public but a Bloomberg report suggested the deal would value Teraco at between $600 million and $1 billion.
Johannesburg-based Teraco is South Africa's leading provider of vendor-neutral colocation and other related services, operating five facilities with 30MW of critical power load serving more than 450 customers, including global Web services giants, across what it calls "five core ecosystems -- telecoms, managed service providers, content, enterprise and financial services." Its facilities are in Cape Town, Durban and Johannesburg, with plans to build another in the Gauteng province.
It claims to run the "most interconnected facilities in Africa," with more than 13,500 interconnects, and provides "onramps of all major cloud providers, as well as to the continent's largest and fastest growing Internet Exchange Point, NAPAfrica." (See NAPAfrica Now One of World's Top 15 Internet Exchange Points.)
Teraco managing director Jan Hnizdo stated: "Berkshire Partners is a like-minded and committed long-term partner that shares our vision for the future: to continue to invest in world-class data center facilities, allowing us to support the digital interconnected enterprise, and meeting the high standards of service that are expected from us. Over the next few years, we aim to double our installed critical power load from 30MW to 60MW and we look forward to working closely with Berkshire Partners on this ambitious growth journey."
CEO Lex Van Wyk added: "Berkshire Partners has prior experience investing in data centers and appreciates the business that we have built… With the Permira funds staying on as a shareholder, there remains continuity in the shareholder base. It is business as usual for the employees and management team of Teraco, and more importantly, for our clients."
Larry Hamelsky, a Managing Director at Berkshire Partners, stated: "We believe that Teraco is exceptionally well-positioned to capitalize on the fast growth of the Sub-Saharan data center infrastructure market given its highly interconnected ecosystems, well-designed facilities, and ability to offer a wide array of deployments."
Permira partner Michail Zekkos added: "The past four years have been a transformational journey for Teraco and we are very pleased to have played a role in growing the business, expanding its ecosystem, and delivering such strong results. We remain very committed to Teraco and the management team -- something that is underscored by our funds’ continuing investment -- and we are excited about bringing in a new partner to support further expansion. Continued secular demand driven by Sub-Saharan Africa's digital transformation, the early stages of outsourcing, and cloud penetration, means that the future looks very positive for Teraco."
— Ray Le Maistre, Editor-in-Chief, Light Reading for Connecting Africa.
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