Vantage Data Centers has signed a definitive agreement to acquire Next Generation Data (NGD), a massive data center facility in Newport, Wales. The deal continues an aggressive European expansion by Vantage, which builds data center campuses for hyperscale customers.
Wales will become Vantage’s sixth strategic market in Europe. In February, Vantage unveiled its acquisition of a large campus in the strategically important Frankfurt market, along with land for greenfield data center campuses in Berlin, Milan, Zurich and Warsaw, Poland.
The expansion is backed by the resources of Digital Colony (part of Colony Capital), which continues its ambitious expansion into digital infrastructure, undeterred by the uncertainties introduced by the COVID-19 pandemic. Digital Colony is funding Vantage’s purchase of NGD from the French investment firm InfraVia Capital Partners, along with the two founders of the business. The transaction is expected to close in the third quarter of 2020. Terms of the deal are not being disclosed.
The acquisition provides Vantage with a huge facility, and lots of room to grow. The campus can support 180 megawatts (MW) of data center capacity, including the existing 72 MW facility and 108MW of expansion capacity.
“As the needs of our hyperscale, cloud and large enterprise customers continue to grow, Wales represents a highly attractive U.K. market offering both lower cost and greater scalability versus London,” said Sureel Choksi, the President and CEO of Vantage Data Centers. “NGD customers benefit from very low network latency to London, low power costs and excellent fiber connectivity, coupled with the company’s massively scalable campus outside London’s highly constrained M25 area.”
Plenty of Room for Growth
Located on 50-acres, the existing NGD property is a Tier III data center using 100 percent renewable energy.The huge facility was originally built in 1998 to house an LG semiconductor plant, but the company never occupied the building. NGD converted the site into a three-story data center facility with enough capacity for more than 17,000 cabinets of servers and storage. The NGD business was bought by InfraVia in 2016 for $130 million
The facility has fiber from multiple Tier 1 service providers, offering customers low latency between Wales and London of less than 1.5 milliseconds. In addition, NGD Cloud Gateway provides multiple access services, including Express Route and Connect, and NGD recently became a new hosting facility for LINX Wales. Published reports indicate NGD hosts a cloud hub for Oracle, as well as IT gear for IBM and BT.
Next Generation Data CEO Justin Jenkins will join Vantage as president, Vantage, U.K., once the acquisition closes. At NGD since its founding in 2007, Jenkins previously served as the company’s CTO and COO before being named CEO in 2018. He has also held leadership roles at Sony Computer Entertainment and several start-up technology companies.
“The NGD team is excited to join Vantage Europe given our shared commitment to operational excellence, high quality facilities and sustainable building practices,” said Jenkins. “Vantage’s global footprint and broad customer relationships, combined with NGD’s growing hyperscale and enterprise U.K. customer base, position us ideally to accelerate the investment and growth of our U.K. business.”
There have been reports that NGD was close to a sale last fall, but no deal materialized. The company recently went public with expansion plans. submitting planning documents for four more three-story data centers at the site.
Colony Continues to Invest
The transaction will be funded with equity commitments from Digital Colony Partners and other investors in Vantage, as well as acquisition debt financing. Marc Ganzi, the CEO of Digital Colony and CEO-elect of Colony Capital, recently indicated that the company had several deals in the works.
“Despite the current market dislocation, Digital Colony remains committed to supporting its portfolio companies.”
CEO Marc Ganzi
“The need for hyperscale data centers is more vital than ever, and we are thrilled to support Vantage Europe in its acquisition of NGD,” said Ganzi, CEO of Digital Colony and CEO-elect of Colony Capital. “Despite the current market dislocation, Digital Colony remains committed to supporting its portfolio companies and meeting the ever-increasing needs of our valued customers around the globe. This strategic acquisition advances that goal, providing Vantage Europe with immediate scale and access to significant renewable energy in the important UK market.”
The entry into Europe is the latest facet of an ambitious expansion for Vantage, which will have data center campuses in 11 markets by the end of 2020. Vantage Data Centers launched in 2010 with a campus in Santa Clara, and in 2017 was acquired by Digital Bridge to serve as a platform for a larger expansion into the wholesale data center industry.
Under the ownership of Digital Bridge (now part of the Colony Capital digital infrastructure empire) Vantage began developing large campuses in Northern Virginia and Phoenix. In 2018 Vantage acquired Canadian provider 4Degrees Colocation, providing a data center footprint in the power-rich market in Quebec. Europe was the next step.
