Liberty Global, an international provider of video, broadband, and wireless services, and Digital Colony Partners II (Digital Colony), the second flagship private equity fund from Colony Capital today announced the formation of AtlasEdge Data Centres, a European edge data center company. Specifically, AtlasEdge intends to deploy over 100 active edge facilities across Europe. Finally, the transaction is expected to close, and the joint venture will launch in Q3 2021.
AtlasEdge Data Centres – Overview
AtlasEdge will deliver services at the “edge” of the network through a number of facilities located close to consumer and enterprise end users. These edge data centers will serve demand from cloud service providers, over-the-top (OTT) media services, and enterprises with high-performance, scalable, and secure facilities.
Overall, AtlasEdge’s facilities will allow customers to distribute low-latency applications and services that require high data traffic throughput. For example, notable use cases include 5G, mobile gaming, internet of things (IoT), and edge compute.
Liberty Global’s operating companies, in four European countries, will be the anchor tenants for AtlasEdge’s data centers. Specifically, these companies include Virgin Media (UK and Ireland), Sunrise-UPC (Switzerland), and UPC (Poland).
Benefits to Wireless Carriers
Colony Capital notes that edge computing in Europe allows wireless carriers like Liberty Global to reduce their cost of digital infrastructure, particularly in an Open RAN or C-RAN environment.
Management
Josh Joshi, an operating partner of Digital Colony, will join and lead AtlasEdge’s Board of Directors as Executive Chairman. Previously, Joshi was the Chief Financial Officer of European data center provider Interxion. Prior to Interxion, he served as Chief Financial Officer of TeleCity, another European carrier-neutral data center operator.
Joint Venture Structure – Digital Colony and Liberty Global
Liberty Global will contribute its digital infrastructure assets and provide strategic & operational support to AtlasEdge. In exchange, Liberty Global notes that it will unlock “hidden value” in its property assets. This is because Digital Colony will purchase an interest in the assets “at levels consistent with European digital infrastructure valuations”.
As part of the joint venture, Digital Colony will provide operating knowledge, strategic direction, and capital to support the growth and consolidation of edge colocation services across Europe.
Colony Capital – Edge Data Centers
AtlasEdge represents Colony Capital’s second foray into edge data centers, following DataBank, which is owned through Colony Capital’s balance sheet and former Digital Bridge funds. Additionally, DataBank, an edge colocation data center business acquired zColo’s edge business in December 2020 for $1.4bn.
DataBank currently operates 64 data centers, representing 138 megawatts of power capacity, with its portfolio primarily U.S.-based. However, the company does own edge facilities in the UK and France, which it acquired through the zColo transaction.
Liberty Global – EdgeConneX
For Liberty Global, AtlasEdge represents a separate, but thematically similar investment to the company’s investment in EdgeConneX, an operator of edge data centers and hyperscale facilities. Notably, Liberty Global rolled-over its equity ownership, as part of EQT Infrastructure’s acquisition of EdgeConneX for $2.7bn from Providence Equity Partners and Brown Brothers Harriman. As of Q1 2021, Liberty Global owns a 5.1% equity interest in EdgeConneX.
EdgeConneX has a substantial presence in Europe, with locations in five markets throughout the continent. Specifically, the company has facilities in Amsterdam (Netherlands), Barcelona (Spain), Dublin (Ireland), Munich (Germany), and Warsaw (Poland).
