REG - Cordiant Digital Inf - Belgian Data Centre Acquisitions

Cordiant Digital InfrastructureAnnouncement

25/10/2024 07:00

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RNS Number : 6570J  Cordiant Digital Infrastructure Ltd  25 October 2024

This announcement contains inside information.

25 October 2024

LEI: 213800T8RBBWZQ7FTF84

 

Cordiant Digital Infrastructure Limited

Belgian Data Centre Acquisitions

 

Cordiant Digital Infrastructure Limited (the "Company" or "CORD"), an
operationally focused investor specialising in digital infrastructure, managed
by Cordiant Capital Inc ("Cordiant", or the "Investment Manager"), is pleased
to announce agreements to, in partnership with TINC NV ("TINC") and another
Cordiant-managed fund, acquire and combine Belgian data centre provider DCU
Invest NV ("Datacenter United", or "DCU"), and the data centre business of
Proximus Group (the "PDC Business", together with DCU the "Combined Group").
CORD and the other Cordiant-managed fund will acquire a 47.5%(1) economic
interest in the Combined Group for a total equity consideration of €92.3
million.

DCU is a Tier III/IV data centre operator with 9 data centres across 8
locations in Belgium. CORD and the other Cordiant-managed fund have agreed to
acquire 47.5%(1) of the share capital of DCU via a mix of new primary equity
and secondary share acquisitions from TINC, the Belgian infrastructure
investor, and DCU's Chief Executive Officer, Friso Haringsma, at an enterprise
value of €72.5 million. Following completion of the DCU Transaction, TINC
will continue to hold 47.5% of the share capital of DCU and Mr Haringsma 5.0%
(non-voting). The new primary equity will provide funding for DCU's
acquisition of the PDC Business.

The PDC Business consists of 4 data centres across 3 locations in Belgium. DCU
has agreed to acquire the PDC Business from Proximus Group, the incumbent
Belgian telecommunications provider, for an enterprise value of €128
million. Prior to closing, the PDC Business will be transferred to a newly
formed company and DCU will acquire the entire share capital of this entity.
Mr Haringsma will become the CEO of the Combined Group and Steven Marshall,
Chairman of Cordiant Digital, will become Chairman of the Board of Directors.

The Combined Group, on a pro forma basis, has 13MW of IT power, generated
revenues of c.€40.3 million and had EBITDA of €15.1 million in 2023.
Closing leverage is expected to be modest, with outstanding gross debt of
c.€10.5 million as at 31 December 2023. The Combined Group has a capacity
expansion potential of an additional11.1MW, most of which could be built
across the existing 11 locations.

As part of the transaction, Proximus has agreed a long-term inflation-linked
master services agreement ("MSA") with the Combined Group, for 10 years with
two 5-year option periods, as well as certain other ancillary agreements which
will govern the overall commercial relationship between the parties. Upon
completion of the transaction, Proximus, as a direct customer, will use 37% of
the Combined Group's IT power capacity. Other customers across the Combined
Group include a mix of blue-chip corporates and government bodies, resulting
in overall current capacity utilisation of c.80%.

The Investment Manager will contribute its expertise in data centres to help
drive the performance of the Combined Group, which will benefit from economies
of scale and cost synergies. These acquisitions will further expand the
Company's EU data centre portfolio, and the Investment Manager sees
opportunities for the acquired data centres to benefit from the Company's
wider network of data centre assets, for example, those existing customers who
may require a second or back-up site in the EU.

The acquisitions are conditional upon the receipt of satisfactory regulatory
approvals and the completion of the acquisition of both businesses. The
purchase considerations for each are also subject to customary adjustments.

The acquisition of the Combined Group is expected to close early Q1 2025.

Cordiant has reached agreement in principle for a separately managed fund to
invest €20 million alongside the Company in the Transaction, which would
reduce the Company's indirect shareholding in the Combined Group to 37.2%.
This co-investment remains subject to agreement between the parties of
definitive documentation.

The Company will acquire its portion of the Combined Group using proceeds of
the Eurobond facilities put in place in June 2024.

The Company's net gearing ratio was 38.4% as at 30 June 2024. On a pro forma
basis, following the investment by the Company in the Combined Group, the
Company's net gearing ratio would be 42.1%. On the same pro forma basis, the
aggregate annual EBITDA of the Company's portfolio, including the
Company-level costs, and its share of the Combined Group would be £138.7
million

The Company's total available liquidity disclosed as at 30 June 2024, pro
forma for this acquisition and assuming CORD subscribes to the full €92.3
million equity consideration, is £257.5 million.

(1.     The Company and TINC will each own 50% of the voting rights of the
Combined Group)

Shonaid Jemmett-Page, Chairman of the Company, said:

"The Board is delighted to announce the agreement to acquire these two data
centre businesses. By bringing these businesses together, there is the
opportunity to create a market leading retail and wholesale data centre
business in this attractive geography. These acquisitions further diversify
the Company's portfolio, provide an opportunity for co-investment and also
provide the potential for further EBITDA and NAV growth through the build-out
and sale of the combined business' remaining space and power following
closing."

Steven Marshall and Benn Mikula, Co-Founders of Cordiant Digital
Infrastructure Management, said:

"We are delighted to be working with TINC, who, as a long-term investor,
shares a common strategic vision for this business and will be able to
co-invest alongside the Company in the further expansion of the facilities.
This transaction could only be successfully executed because of the Investment
Manager's ability to create a potentially valuable combination from a complex
situation. The acquisition provides a good foundation for the Manager's value
creation plan for these assets. The transaction shows the Manager's
operational data centre expertise and ability to source transactions that meet
its demanding criteria for capital deployment."

The Company will be hosting a remote presentation for analysts On Friday,
October 25(th) at 12.00pm BST. For those wishing to log in to this, please
contact Ali AlQahtani at Celicourt via CDI@celicourt.uk
(mailto:CDI@celicourt.uk) .

 

For further information, please visit www.cordiantdigitaltrust.com
(http://www.cordiantdigitaltrust.com) or contact:

 Cordiant Capital Inc.                                    +44 (0) 20 7201 7546

 Investment Manager

Stephen Foss, Managing Director
 Aztec                                                    +44 (0) 1481 749700

 Company Secretary and Administrator

Chris Copperwaite / Laura Dunning
 Investec Bank plc                                        +44 (0) 20 7597 4000

 Joint Corporate Broker

 Tom Skinner (Corporate Broking)

 Lucy Lewis / Denis Flanagan (Corporate Finance)
 Jefferies International Limited                          +44 (0) 20 7029 8000

 Joint Corporate Broker

 Stuart Klein / Gaudi Le Roux
 Celicourt                                                +44 (0) 20 7770 6424

 PR Adviser

Philip Dennis / Ali AlQahtani / Charles Denley-Myerson

 

Notes to Editors:

About the Company

Cordiant Digital Infrastructure Limited primarily invests in the core
infrastructure of the digital economy - data centres, fibre-optic networks,
telecommunications and broadcast towers - in Europe and North America.
Further details about the Company can be found on its website
at www.cordiantdigitaltrust.com (http://www.cordiantdigitaltrust.com/) .

 

The Company is a sector-focused specialist owner and operator of Digital
Infrastructure, listed on the London Stock Exchange under the ticker CORD.
In total, the Company has successfully raised £795 million in equity, along
with a debt package that includes a €375m Eurobond with a consortium of
blue-chip institutions; deploying the proceeds into five acquisitions: CRA,
Hudson, Emitel, Speed Fibre and Norkring, which together offer stable, often
index-linked income, and the opportunity for growth, in line with the
Company's Buy, Build & Grow model.

 

About the Investment Manager

Cordiant Capital Inc is a specialist global infrastructure and real assets
manager with a sector-led approach to providing growth capital solutions to
promising mid-sized companies in Europe, North America and selected global
markets. Since the firm's relaunch in 2016, Cordiant, a partner-owned and
partner-run firm, has developed a track record of exceeding mandated
investment targets for its clients.

 

Cordiant focuses on the next generation of infrastructure and real assets:
sectors (digital infrastructure, energy transition infrastructure and the
agriculture value chain) characterised by growth tailwinds and technological
dynamism. It also applies a strong sustainability and ESG overlay to its
investment activities.

 

With a mix of managed funds offering both value-add and core strategies in
equity and direct lending, Cordiant's sector investment teams (combining
experienced industry executives with traditional private capital investors)
work with investee companies to develop innovative, tailored financing
solutions backed by a comprehensive understanding of the sector and
demonstrated operating capabilities. In this way, Cordiant aims to provide
value to investors seeking to complement existing infrastructure equity and
infrastructure debt allocations.

 

About DC Invest NV

Datacenter United, a subsidiary of DC Invest NV, is a market leading Tier
III/IV data centre operator based in Belgium. The group operates 9 data
centres across 8 locations in the Flanders region, with a strong presence in
Antwerp, Ghent and Bruges. The group has an experienced management team led by
Friso Haringsma.

About the PDC Business

The PDC Business consists of the Tier III Brussels data centre assets
currently owned by Proximus, the market leading telecommunications operator in
Belgium. The business has 4 data centres in 3 locations, all around the
Brussels region. Proximus remains a key customer of the business under a new
10-year index-linked contract with two 5-year extensions.

About TINC

TINC participates in companies that realise and operate infrastructure. TINC
aims to create sustainable value by investing in the infrastructure for the
world of tomorrow. Focus areas include public infrastructure, energy
infrastructure, digital infrastructure and selective real estate.

Founded in 2007, TINC has been listed on Euronext Brussels since 12 May 2015.
As a listed investment company, TINC has a platform for the further financing
of its growth. This platform is accessible to both private and institutional
investors, and allows them to invest in capital intensive infrastructure in a
liquid, transparent, and diversified way.

TINC is currently active in Belgium, the Netherlands, Ireland and France, and
aims for further geographical expansion into other European regions,
preferably through established and proven partnerships with industrial,
operational, and financial partners.

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