DigitalBridge Group, Inc. announced the recapitalization of DataBank, a leading countrywide edge data center platform, which is part of its portfolio. The first stage of the recapitalization will consist of selling ownership shares to Swiss Life Asset Management AG and EDF Invest affiliates. In addition, SLAM and EDF will buy 27 percent of DataBank's fully diluted equity holdings for $1.2 billion in cash from existing investors under the terms of the transaction.
"Since we acquired DataBank in 2016, we have scaled its footprint, capacity and customer base in key metro areas across the United States, transforming DataBank from a business serving three markets with six facilities to the premier edge infrastructure platform serving twenty-seven markets across more than sixty-five facilities. The formation of this new permanent capital vehicle allows DigitalBridge shareholders to maintain significant exposure to the next phase of value creation at DataBank alongside our new co-investors while also freeing up significant capital at an attractive valuation to fuel additional digital M&A," said Marc Ganzi, CEO of DigitalBridge.
DataBank is the largest edge infrastructure operator in the United States, enabling the world's leading organizations, technology companies, and content providers to deploy and manage mission-critical applications and data on a nationwide platform. More than 65 data centers, 20 interconnection hubs in more than 27 markets, on-ramps to an ecosystem of cloud providers, and a modular edge data center architecture make up DataBank's portfolio.
"This recapitalization allows us to accelerate our expansion efforts and capture the substantial secular growth in edge computing. DataBank is strategically positioned as the leading platform to deliver and enable the network edge ecosystem as a shift from traditional centralized infrastructures continues to evolve to the edge,"
Raul Martynek, DataBank's CEO
DigitalBridge's ownership interests in DataBank will reduce to 15.5 percent upon completion of this initial phase of the recapitalization, and DigitalBridge will receive cash proceeds of $230 million, implying a pre-transaction net value of $906 million, inclusive of the retained net worth of $676 million, as announced in this release.
Before the recapitalization's scheduled completion in the fourth quarter of 2022, incremental new investors, including DigitalBridge, are expected to acquire ownership interests in DataBank from existing investors, including DigitalBridge. Various closing conditions, including regulatory approvals, will be imposed on the recapitalization transactions. A Current Report on Form 8-K filed by the Company with the US Securities and Exchange Commission contains more data about the recapitalization's principal provisions.
Swiss Life Asset Managers were advised by financial advisor DH Capital and legal advisor Vinson & Elkins LLP. Goldman Sachs served as a financial advisor, and Proskauer Rose LLP served as a legal advisor to DataBank. Wachtell, Lipton, Rosen & Katz served as legal counsel to DigitalBridge. In addition, DigitalBridge's Independent Transaction Committee of the Board of Directors hired PJT Partners as its exclusive financial advisor.