Berkshire Partners buys majority stake in data-centre firm Teraco

The deal is subject to the approval of the Competition Commission.

South Africa’s data centre operator, Teraco Data Environments, will be acquired by Berkshire Partners, a Boston-based investment firm.

Berkshire has entered into an agreement with Teraco to acquire a majority stake in the company. “The Permira funds, an existing shareholder, will remain a significant investor,” said Teraco.

Teraco said the Permira funds initially backed a Teraco management buyout in December 2014 and in that time the business has multiplied its capacity more than six times.

The deal is subject to the approval of the Competition Commission, South Africa’s competition watchdog. The deal is expected to close in the first quarter of 2019.

The terms of the deal including its value was not disclosed. According to a Bloomberg report, Teraco was expected to fetch between $600 million and $1 billion, including debt.

Teraco operates five high-quality facilities with 30MW of critical power load serving more than 450 clients, including global Internet companies, across five core ecosystems. It also hosts the continent’s largest Internet Exchange Point, NAPAfrica.

Jan Hnizdo, the MD of Teraco, said 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 centre facilities”.

“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,” said Jan.