Few data center players have experienced the transformational power of acquisitions like Vantage Data Centers. The company was founded in 2009 to redevelop a former Intel facility in Silicon Valley, but now operates 23 campuses across four continents.
Last week’s expansion into the Asia-Pacific market provides Vantage with a footprint that stretches from Warsaw to Kuala Lumpur, including assets acquired Thursday from Agile Data Centers and PCCW. The deal included $1.5 billion in fresh equity investment from Vantage’s financial backers, led by DigitalBridge.
Agile has been developing greenfield data center projects in Tokyo, Osaka and Melbourne totaling 168 megawatts of capacity, while the PCCW assets add another 100 megawatts in Hong Kong and Kuala Lumpur, Malaysia.
“This gives us the ability to jump-start our expansion into APAC with two companies, including both greenfield projects and existing operational facilities, and a great team,” said Sureel Choksi, CEO of Vantage Data Centers. “This gets us in the market quickly, and allows us to put the pedal to the metal.”
Growth Trajectory Backed by DigitalBridge
Rapid global growth has been the theme for Vantage since 2017, when the company was acquired by DigitalBridge, which was seeking a platform to target the wholesale data center market to complement DataBank, its portfolio company for colocation and edge computing.
Vantage and DataBank have been central pieces in DigitalBridge’s effort to weave a rich tapestry of digital infrastructure investments, bringing together investors, executives, brands and data center assets in a $35 billion portfolio.
Since becoming part of DigitalBridge, Vantage has been boosted by billions of dollars in investment, enabling it to both build and buy data centers.
- In 2017, Vantage launched a $1 billion expansion into Northern Virginia, the world’s largest cloud computing market, with a campus in Ashburn.
- In 2018, acquired 4Degrees Colocation and two data centers in the growing cloud hub in Quebec, Canada.
- In 2019, the company announced plans for a 1 million square foot campus in Goodyear, Arizona to enter the Phoenix market. That campus is currently under construction.
- In early 2020, Vantage entered the European market with $2 billion in acquisitions, buying Etix Everywhere and its Frankfurt campus along with land parcels in Berlin, Milan, Zurich and Warsaw.
- In April 2020 it extended its European expansion, buying Next Generation Data and its massive facility in Cardiff, Wales.
- Last November Vantage acquired Hypertec, adding three data centers to expand its footprint in Montreal.
DigitalBridge has been eyeing the Asian market for some time. Last year it formed Agile Data Centers, a data center development firm led by Giles Proctor, an experienced leader who previously worked in the data center operations of Amazon Web Services and Equinix. In July, DigitalBridge announced plans to acquire the data center business of PCCW, the global telecom firm.
Proctor will now serve as president of Vantage’s APAC business and its 150 employees. Brian Groen, senior vice president of data centers, PCCW DC, will join Vantage as senior vice president, APAC.
“As we continue building a global digital infrastructure platform, we recognized a strategic opportunity to combine the market penetration, expertise and strength of two valuable portfolio companies, Vantage and Agile, with the established foothold of PCCW DC to serve customers in this high growth region,” said Jon Mauck, senior managing director of DigitalBridge Investment Management.
“The Vantage team has proven across North America and Europe that it is highly skilled at taking full advantage of both acquisitions and greenfield opportunities to quickly become a leading provider in new markets,” Mauck added.
Strong Customer Appetite for Global Capacity
Vantage works with many of the large hyperscale operators, and Choksi said these companies are clamoring for more capacity in the fast-growing Asia-Pacific market.
“Earlier this year we sat down with DigitalBridge, and with Giles, and shared that we’re getting a lot of inquiries from our customers about planning in APAC,” said Choksi. “We love what they’re doing, we love the teams, and we think this is really a case of one plus one equals three.”
The combination illustrates the advantages of the platform approach to data center development, as Vantage can offer a unified approach to the design of future data centers and a repeatable lease template that makes it simpler for customers to add capacity across the globe.
“We are now on our fifth and sixth acquisitions as a company ,and all of those are international,” said Choksi. “We’ve learned what to do, and what not to do. Thankfully, there have been no big mistakes, but there’s always issues as you work through fairly complex integrations.
“What that’s allowed us to do is create a playbook for how we do things going forward,” Choksi continued. “While we announced the transaction today, we’ve been able to really plan and collaborate from an integration planning perspective for the better part of three months as the transactions have been coming together, which gives us a nice head start.”
The Asia-Pacific expansion positions Vantage to compete more effectively with other large operators that offer data center capacity across global markets – a group led by Digital Realty, Equinix and NTT Global Data Centers. Iron Mountain and EdgeConneX are also entering Asia through investments in the Indian data center market.
Choksi joined Vantage in 2013, and has been notable for emphasizing the human factor in building a digital development firm.
“This isn’t just about how many megawatts are built or expansion capacity,” said Choksi. “It’s not just about the existing customers, although we love them. The question is: Do we have a team that we can really rely on from a leadership perspective? Because distance and time zones and languages are a factor when you’re dealing with Europe, and I’d say it’s more of the same here – maybe even a more challenging to navigate from a time zone dynamic.”