Berkshire Partners Becomes Majority Shareholder in Teraco

BOSTON, MABloomberg is breaking the news that Boston-based Berkshire Partners LLC has acquired a stake in Teraco Data Environments Pty Ltd., Africa’s largest data center operator. Berkshire Partners is now the majority shareholder in Teraco, which is based in Johannesburg, South Africa and also operates data centers in Durban & Cape Town.

Though terms of the deals have not been made public, Teraco has been looking for such an investor for some time and industry observers expected that it would command somewhere between $600 Million and $1 Billion USD, which includes debt. The deal also follows many overtures from Permira Holdings LLP, based in London, seeking a buyer for their portion of the Teraco. Back in 2015, Permira backed backed a management buyout of Teraco. Permira does plan to remain a minority shareholder, according to Bloomberg.

“Berkshire Partners is a committed long-term partner that will assist us with future growth plans and additional investment,” wrote Jan Hnizdo, Managing Director for Teraco, in an email to Bloomberg.

Teraco’s four data centers, whose clients include Amazon Web Services and China Telecom Global Ltd, boast 30 megawatts of capacity, and Tercao hopes to expand to 60 megawatts by 2023. The company has previously announced that it plans to expand their data center Cape Town as well as build a new one in Gauteng. Teraco’s total investment in South Africa clock in at right around $325 Million USD.

“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,” wrote Larry Hamelsky, another Managing Director, at Teraco, in an official press release.

This is not Berkshire Partners’ first foray into the data center industry. In the past, they jointly acquired Telx from GI Partners with Abry Partners (though they have since sold Telx to Digital Realty). More recently they invested in the Edge computing start-up Vapor IO.