Piemonte Holding, a private equity firm in Brazil, announced an equity investment from Goldman Sachs Asset Management’s Private Credit business into its Brazilian data center portfolio company, Elea Digital SA. Goldman Sachs’ investment in Elea Digital will enable the company to deploy capital expenditures into its existing data centers in Brazil (see below), as well as further expand its geographic footprint around Latin America. By year-end 2021, Piemonte Holding expects that its cumulative data center investments will exceed $200m USD.
Elea Digital – Backing from Piemonte Holding, Goldman Sachs
Elea Digital was founded in 2019 by Piemonte Holding and currently owns six data centers, with a minority interest in a seventh facility. Overall, these data centers comprise 10+ megawatts of power capacity across 190k sqft (17.6k sqm) of area. Geographically, the company operates in the cities of Curitiba, Porto Alegre, São Paulo, Brasília, and Rio de Janeiro.
Oi SA – UPI Data Center
Elea Digital secured the majority of its assets from the carve-out of Oi SA’s UPI Data Center unit by Piemonte Holding. Specifically, in March 2021, Piemonte Holding’s Titan Venture Capital entity closed on the acquisition of the UPI Data Center unit for an enterprise value of R$325m ($57.9m USD). At closing, an initial cash payment of R$250m ($44.5m USD) was made, with the remaining R$75m ($13.4m USD) to be paid in future installments.
Through Oi SA’s UPI Data Center unit, Elea Digital gained five data centers. Particularly, these facilities are located in the Brazilian cities of Curitiba, Porto Alegre, São Paulo, and Brasília (2). In aggregate, these data centers comprise 76.9k sqft (7.1k sqm) of area. Below are the five facilities, through which Elea Digital will provide Oi SA a total of 1,577 racks, at minimum:
- Curitiba – DC CTA: 220 racks located in Curitiba at Travessa Teixeira de Freitas, 75, São Francisco
- Porto Alegre – DC PAE: 121 racks located in Porto Alegre at Rua Engenheiro Afonso Cavalcanti, 100, 3º andar, Bela Vista
- São Paulo – DC SPO: 196 racks located in São Paulo at Av. Guido Caloi, 1000 – Edifício 7, Jardim São Luiz
- Brasília – DC SIG: 488 racks located in Brasília at Quadra 2 Lote 470 a 520, Setor De Industrias Gráficas
- Brasília – DC SCN: 552 racks located in Brasília at Quadra 03 Bloco A Lote F – 1º Subsolo, Asa Norte
Also, post-acquisition, Elea Digital added customers including large telco companies and financial institutions.
Capital Expenditures
As part of its sale and purchase agreement with Oi SA, Piemonte Holding agreed to a minimum capital expenditure covenant for the data centers purchased. Specifically, Piemonte will invest at least R$42m ($7.5m USD) during the two years following transaction closing (i.e., through March 2023). Therefore, Goldman Sachs’ investment into Piemonte’s Elea Digital may contribute towards this capital expenditure funding need.
Grupo Globo
In July 2021, Piemonte Holding’s Elea Digital (via Drammen RJ Infraestrutura) announced the acquisition of a ~2-megwatt data center located in the west zone of Rio de Janeiro’s metro area from Grupo Globo, a Brazilian media group. The facility, which is being sold by subsidiary Globo Comunicação e Participações, resides on 73.6k sqft (6.8k sqm) of land and has 56.8k sqft (5.3k sqm) of built area.
Additionally, Globo singed a long-term colocation contract with Elea Digital for its continued use of the data center.
GBT S.A.
Elea Digital, through the entity EL01 Digital SA, is a 22% shareholder of GBT SA, which owns a data center in Brasília. Within GBT, Elea controls 56.0k sqft (5.2k sqm) of colocation area in the 258k sqft (24k sqm) data center campus. Finally, GBT SA’s main clients include Caixa Econômica Federal and Banco do Brasil.
Elea Digital – Strategy
Elea Digital intends to support the development of cloud computing and 5G technologies with its data center infrastructure. Also, the company’s facilities will reside at the ‘edge’ and extend the cloud from central regions of Brazil.
Customers
Overall, Elea Digital primarily serves customers in the information technology, telecom, banking, media, and public sectors.
Investment Capital
In addition to Goldman Sachs’ equity investment, Piemonte Holding has raised R$2.5bn ($442m USD) to invest in data centers. Particularly, Piemonte will focus its investments on the telecom market, fiber optic cables, and 5G developments.
