Teraco Data Environments gets boost from Permira

By Marcello Conti

Milano—Sunburst Africa–Last December, South Africa’s leading provider of carrier neutral datacentre services- Teraco Data Environments, had a boost after Permira, one of Europe’s largest private-equity firms, made its first African investment into Teraco. Established in 2008 following the deregulation of the South African telecoms market, Johannesburg-based Teraco is the largest provider of carrier neutral datacentre services in Sub-Saharan Africa with the most interconnected datacenter in the whole region. The company operates three high quality facilities serving more than 170 clients, including many blue chip companies, across five key client hubs – telecoms, outsourcing, content, enterprise and financial – and offers colocation and related services in highly secure and reliable datacentre environments.

The goal of the operation for the Europe’s firms is quite simple. Permira want to sets his roots in a strategic region and enter in a growing market that could lead Teraco to became one of the most important companies in the country. Teraco has built an important strategic position to capture the regional opportunity as a trusted and secure partner with reliable power sources. The Permira funds’ investment will support the company’s growth plans, including the strengthening of its sales and marketing platform and its expansion into Sub-Saharan Africa. “The datacenter market is supported by the growth in the adoption of Internet and smart devices in Africa,” Permira said. In fact, the market in South Africa is growing rapidly, with only one tenth of datacentre facilities outsourced compared with a third in the US and a quarter in Europe. Even if the terms of the transaction were not disclosed, it’s undeniable that the interest by Western private equity funds in Africa is increasing. Last year the U.S. buyout house KKR made its first African investment as well. The company bought Afriflora, an Ethiopian flower-growing company, for around $200 million. In 2014, levels of private equity investment in Africa hit $2.2 billion, their highest level in the last 15 years. More than half of that has been in the telecommunications industry, according to Thomson Reuters data, followed by the industrials and energy sectors.With this operation, Permira joins U.S. rivals KKR&Co, Blackstone Group and Carlyle Group, which are expanding their operations in Africa. South Africa boasts as one of the continent’s most developed economies and deepest financial markets, though growth is hindered by high unemployment, falling commodity prices and the threat of power shortages.

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