Digital 9 Infrastructure (LON: DGI9), an externally managed closed-end investment trust focused on digital infrastructure, today announced that it has agreed to acquire Volta Data Centres (GAData Holdings Limited), a retail colocation provider focused on the enterprise data center segment, which operates one facility in London, UK. Specifically, Digital 9 Infrastructure is purchasing Volta Data Centres, for £45m ($59m USD), from Apollo Global Real Estate (AGRE), the real estate investment arm of Apollo Global Management, and Glebe Asset Management, a UK-based property firm led by David Phillips.

At the time of Apollo and Glebe’s original investment in 2012, the firms stated that they would undertake a “complete refurbishment” of the future data center building, amounting to a £60m all-equity investment.

Overall, based on the £45m enterprise value ascribed to Volta Data Centres and its run-rate EBITDA of £2.7m, Digital 9 is valuing the business at a 16.7x EV/EBITDA multiple.

Volta Data Centres – Overview

Volta Data Centres owns and operates a single data center located at 36-43 Great Sutton Street in the district of Farringdon, within central London. Through this facility, Volta provides retail colocation services to 100+ customers, offering 6 megawatts of IT capacity across 91k sqft of gross area / 46k sqft of net technical area.

Customers

Enterprise customers are Volta’s focus, with its client base comprising finance, media, technology, telecommunications, and energy companies. Presently, Volta’s weighted average contract length with these customers is 5.8 years.

Additionally, 50%+ of Volta’s megawatts sold have a direct power pass-through in their contract, which Digital 9 highlights as reducing Volta’s exposure to power price fluctuations. However, the reverse is also true, whereby ~50% of Volta’s megawatts sold do not have a direct power pass-through in their contract, leaving a part of the company meaningfully exposed to power price fluctuations.

Power

Volta’s data center is connected to London’s 33 kV network, supplied by two independent grid substations providing resiliency and 100% uptime since inception. Presently, Volta operates at a power usage effectiveness (PUE) of 1.5.

Connectivity

Volta’s carrier-neutral facility offers connectivity to 40+ networks, including carriers and fiber providers, with 10+ diverse entry points into the building. For example, these connectivity providers are BSO, Cogent Communications, Colt Technology Services, euNetworks, EXA Infrastructure (formerly GTT Communications), Liberty Global, Lumen Technologies, Neos Networks, Openreach (BT), Verizon, Virgin Media, Vodafone, and Zayo.

Also, Volta Data Centres offers direct access to multiple cloud platforms through partnerships with Megaport, IX Reach (BSO), Epsilon, London Internet Exchange (LINX), and Amsterdam Internet Exchange (AMS-IX).

Land Tenure

In terms of land tenure, Volta Data Centres’ London building is held under a long-term leasehold with ~120 years of remaining term.

Financials

For the year ended December 31, 2021, Volta Data Centres generated revenue of £6.9m ($9.3m USD) and run-rate EBITDA of £2.7m ($3.6m USD). Furthermore, as shown below, Volta’s operating performance has been improving since 2018:

Financials2018201920202021
Revenue£4.9m£5.3m£5.5m£6.9m
EBITDA-£2.3m-£0.7m£0.1m£2.7m*
*Run-rate EBITDA

Transaction Advisor

Akur Capital, led by Tom Frost, was the financial advisor for Digital 9 Infrastructure.

Digital 9 Infrastructure – Portfolio

Digital 9 Infrastructure’s acquisition of Volta Data Centres marks the firm’s third investment in the data center sub-sector of digital infrastructure. To-date, Digital 9 has raised total equity of £845m ($1.1bn USD) and, beyond Volta Data Centres, has made the following 5 investments:

  1. Aqua Comms: owns and operates 12.5k miles (20.2k kilometers) of trans-Atlantic and regional subsea cables
  2. EMIC-1: 6.2k mile (10k kilometer) subsea cable and terrestrial fiber system, known as Europe Middle-East India Connect 1, in-partnership with the 2Africa PEARLS system being developed by Facebook (Meta)
  3. Verne Global: data center operator in Iceland with a 24-megawatt campus near the town of Keflavik, which is scaling to 40 megawatts through a development project
  4. SeaEdge UK1: 10.6-megawatt data center and landing station located in Newcastle, England, which connects with the North Sea Connect and NO-UK subsea cables
  5. Host Ireland: enterprise broadband provider in Greater Dublin, which leverages fixed wireless access (FWA) technology, specifically, utilizing high-frequency E-Band spectrum

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