InfraVia Capital Partners has launched a sale of its majority stake in the Welsh data centre business Next Generation Data (NGD) as it seeks to tap into growing infrastructure fund interest in the sector since acquiring it three years ago.
The French manager, which acquired a 60% stake in NGD in 2016 from shareholders including the business’s management, has appointed RBC to advise on the process, sources following the process said. Teasers have been sent to potential buyers, two of the sources said, with one adding that first bids are due soon.
Infrastructure investors have been increasingly buying into data centres in recent years, but exits by infrastructure funds have been rare as it is a relatively new sector for them to invest in.
“They haven’t had it for very long but the sector has become a lot hotter since they bought it so they probably think they can get a good price,” said one industry observer.
They are valued by infrastructure investors because they generally benefit from stable revenue underpinned by increasing demand for data as use of smartphones and other devices increases.
NGD earlier this month reported EBITDA of GBP 12.6m for 2018, up 40% from the previous year, on revenue up 49% to GBP 29.6m and said it expects continued strong growth in 2019.
NGD (pictured) was founded in 2007 by a group of telecoms professionals, including its current management team, and is the biggest data centre in the UK with 750,000 square feet of space. It also benefits from a private connection to the UK electricity network operator’s high voltage “SuperGrid”, giving it access to power that is hard for competitors to emulate. The company’s management owns the remaining 40% stake.
Recent purchases of data centre businesses by infrastructure funds include DWS agreeing to acquire Dutch telecoms business KPN’s data centre subsidiary NLDC and Asterion Industrial Partners acquiring a portfolio of centres in Spain and the Americas from telecoms giant Telefónica.
EBITDA multiples for the deals were not disclosed but recent transaction multiples include the 10 times EBITDA InfraVia paid for Altice’s data centre subisidiaries Green.ch and Green Datacenter in 2017, as reported.
Digiplex, a Scandinavian data centre business that was put on the market last year and circled by infrastructure funds in early stages, could sell for 20 times EBITDA, as reported.
Aside from NGD and the Altice businesses it bought, InfraVia also has an investment in Etix Everywhere, which specialises in developing customised data centres around the world.
InfraVia and NGD did not immediately respond to requests for comment.
Aside from NGD, InfraVia is also selling its French smart metering business Ocea Smart Building, as reported, and also last month announced an agreement to sell a 51% stake in Guadeloupe hydropower operator Force Hydraulique Antillaise to 3i Infrastructure-backed power producer Valorem.