EdgeConneX, a global data center operator, and Adani Enterprises, the infrastructure investment arm of the Adani Group, which is one of India’s largest infrastructure organizations, today announced the establishment of a 50%/50% joint venture, known as AdaniConneX. Specifically, the joint venture will develop and operate data centers throughout India to address India’s rapidly growing need for high-quality and reliable digital infrastructure.
AdaniConneX India Joint Venture – Adani Enterprises and EdgeConneX
Both Adani Enterprises and EdgeConneX will invest significant capital into the India joint venture. Specifically, AdaniConneX intends to develop 1 gigawatt (GW) of data center capacity over the next decade. These data centers will include both hyperscale and edge facilities, which will largely receive renewable energy power.
Firstly, the joint venture will build-out a network of hyperscale data centers in India, starting with the Chennai, Navi Mumbai, Noida, Vizag, and Hyderabad markets. Indeed, development and construction at these sites has already begun.
Secondly, AdaniConneX will develop a portfolio of edge data centers throughout India. Indeed, these edge data centers will support the need for more proximate capacity. Moreover, the design and planning of these edge facilities allows them to scale with demand. Ultimately, these edge facilities can become full-scale data center campuses.
India currently has one of world’s largest subscriber populations by data usage. Therefore, data centers are fundamental pieces of digital infrastructure that India needs, in order to grow. Indeed, India requires this reliable data center infrastructure to support both existing and emerging use cases. For example, these use cases include the cloud, content, Internet of Things, 5G, artificial intelligence, and enterprise requirements.
Adani Enterprises – Overview
Adani Enterprises focuses on building and managing large and emerging infrastructure projects throughout India. Indeed, the company has expertise in full-stack energy management, renewable power, and real estate development. From a digital infrastructure standpoint, Adani Enterprises has access to subsea cable landing stations, and several nodes across the country that will serve as edge locations.
EdgeConneX – Overview
EdgeConneX operates 50 data centers in 33 markets across North America, Europe, and South America. The company’s strategy has a dual focus on both edge data centers and hyperscale facilities.
Initially, EdgeConneX began by serving over-the-top (OTT) media and content delivery network (CDN) customers, through edge data centers. However, the company has evolved over the past years to serve the wholesale and hyperscale data center segment as well. Specifically, EdgeConneX has signed multi-megawatt leasing deals with large cloud service providers, such as Microsoft Azure, who require the build-out of new hyperscale data centers.
EdgeConneX – Financial Backing
EdgeConneX is owned by EQT Infrastructure, a Sweden-headquartered private equity firm. In August 2020, EQT Infrastructure agreed to acquire EdgeConneX from Providence Equity Partners and Brown Brothers Harriman. In terms of valuation, EdgeConneX was purchased for $2.7bn, equating to a multiple of 24.0x EBITDA. For further comparable transactions, check out our comprehensive list of data center precedent M&A transactions here.
Digital Realty and Adani – India Memorandum of Understanding
Today’s announcement with EdgeConneX follows a similar intended partnership, between Digital Realty and Adani Group in India, that ultimately was not consummated. Specifically, in October 2019, Digital Realty and the Adani Group announced that they had executed a memorandum of understanding (MoU) to establish a joint venture in India.
Furthermore, Bill Stein, Chief Executive Officer of Digital Realty, referenced the Adani MoU on the company’s Q4 2019 earnings call. Specifically, he said that Digital Realty was “actively exploring opportunities to plant our first flag in this vast, untapped market with tremendous growth potential”. Indeed, even after extending the MoU by a further three months, Digital Realty and Adani Group were not able to finalize a formal joint venture agreement.