Connecting Africa is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 3099067.


Berkshire Partners Takes Control of Data Center Specialist Teraco

Article Image
As the data center hosting and cloud services market starts to pick up in key market across Africa, so the money starts flooding in. The latest example is the planned acquisition by investment firm Berkshire Partners LLC of a majority stake in Teraco Data Environments, a major provider of colocation data center infrastructure in South Africa. (See Vodacom, Microsoft Launch Azure Cloud Services, Liquid Telecom Revamps Data Centers in Major Cloud Expansion and Liquid Telecom Teams With Microsoft to Deliver Cloud Services.)

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.)

The company believes the "data centre market in Africa is poised for continued strong growth with increasing demand for global applications, content, and the accelerating adoption of cloud services." Indeed, and such trends have attracted major international names such as Amazon Web Services and Microsoft to the market, both of which are building their own facilities, though not as quickly as initially planned. (See AT&T Expands Edge Computing Testing to Enterprise Use Cases and AWS Plans Further Cloud Investments in South Africa.)

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.

Innovation hub


Hot startup of the month: Rwanda's Smart Ikigega

This month's hot startup, Smart Ikigega, wants to revolutionize the rural agricultural trade ecosystem in Rwanda by helping farmers access finance and harvest insurance.


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.

More Innovation hub

Sponsored video

More videos

Flash poll

All polls

Latest video

More videos

Africa Tech Perspectives


Deep dive into East Africa's tech startup ecosystem

New survey reveals a lack of access to investors, reliance on international VCs and global recession trends as the biggest barriers for East African tech startups to access funds.


Challenges and opportunities for women's tech careers

A new survey reveals that COVID-19, the cost-of-living crisis, skills shortages and a lack of mentorship have negatively affected women's career development over the past two years.


Survey: Opportunities for Women in Tech

Take our new survey for women across Asia, Europe and Africa looking at the biggest challenges and opportunities for women-led enterprises and trends in tech careers for women.

More AfricaCom perspectives

Guest Perspectives


Omdia View: July 2022

By Omdia Analysts

Kenya and Zambia move towards 5G with new spectrum allocations while Tunisie Telecom plans to shut down its 3G network - that and more in this month's Omdia View.


Omdia View: June 2022

By Omdia Analysts

5G was the major news trend across Africa in June, as Orange became the first operator to launch 5G in Réunion and operators in Senegal accelerated their 5G plans despite spectrum delays.

More Guest Perspectives

Industry announcements

More Industry announcements

Partner perspectives

All Partner Perspectives

Like us on Facebook

Newsletter Sign Up

Sign Up