Investor News

News, deals and announcements from investor community about digital infrastructure

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Melody Investment Buys Over 500 Towers for $220M From Uniti

May 13, 2020

SOURCE: InsideTowers.com

Melody Investment Advisors, an asset manager focused on communications infrastructure, yesterday announced the acquisition of 90 percent of Uniti Towers, the wireless tower business of real estate investment trust Uniti Group Inc. (NASDAQ:UNIT). The purchase totals approximately $220 million in cash and includes over 500 towers based in the U.S. Melody Investment Advisors will fund the purchase from Melody Communications Infrastructure Fund II.

Through an investment in an affiliate of Melody, Uniti will retain a 10 percent investment interest in the tower business and will receive an incremental earnout from Melody for each additional pipeline tower completed in 2020. In addition, as part of the transaction, Melody and Uniti will enter into a strategic relationship to collaborate on integrated solutions for wireless carriers requiring towers, fiber and small cell infrastructure. The transaction is subject to various closing conditions and is expected to close by the end of second quarter 2020.  

With the addition of Uniti’s towers, Melody and its affiliates now own and market more than 4,000 towers, ground leases and structure and rooftop leases, including pipeline sites. Melody and its affiliates are a top five independent owner of national wireless infrastructure assets and claim to be one of the largest privately owned telecom landowners in the U.S.

“As the transition to 5G continues, communications infrastructure is one of the fastest growing, most stable and critical segments of the economy. We are excited about the addition of these towers to our expanding portfolio and the benefits they will bring both to our carrier partners and to our investors,” said Omar Jaffrey, Managing Partner and Founder of Melody Investment Advisors. “We look forward to working with Uniti as we continue to grow and invest in our wireless infrastructure platform while seeking further growth through acquisitions.”

Aerial view of city

Alphabet Vets raise $400 million to Remake America’s Infrastructure

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SOURCE: Fortune

By Jeff John Roberts

May 7, 2020

As the U.S. hunkered in lockdown mode in mid-April, the influential venture capitalist Marc Andreessen published a viral essay titled “Time to Build.” The essay decried the complacency of Western democracies prior to the COVID crisis, and called for a mass rebuilding of physical and social infrastructure. It’s time, Andreessen said, to start over with everything: Roads, housing, education, the health system, the works.

Andreessen is not the only one to see an opportunity in the pandemic. Angela Merkel, the German Chancellor, has called for using economic recovery funds to further climate protection. And in the U.S., two veterans of Google’s parent company, Alphabet, tell Fortune that they are embarking on a massively ambitious plan to reimagine four pillars of the country’s infrastructure—and are drawing on an equally massive purse to do so.

The Google vets, Jonathan Winer and Brian Barlow, are co-CEOs of a new holding company called Sidewalk Infrastructure Partners (SIP for short) that is a spin-off of Alphabet’s cities-of-the-future arm, Sidewalk Labs. According to a securities filing, SIP has raised a Series A funding round of $400 million from Alphabet and investment giant, Ontario Teachers Pension Plan.

SIP claims it has a novel tech-powered approach to modernize the country’s infrastructure like never before. In the company’s first interview, Winer described how SIP plans to transform everything from recycling to how America deploys driverless cars—and how the new venture plans to avoid the political and public relations pitfalls that have tripped up Sidewalk Labs.

Solving the plastics problem

For a company looking to take on intractable infrastructure problems, SIP has more than a few to choose from. Take plastics. Right now, the U.S. is drowning in plastic waste. The country has never been able to recycle plastic to the same extent as metal or paper, and China’s recent decision to stop accepting overseas waste means piles of plastic garbage are growing ever higher. Now, the pandemic is exacerbating the problem as more stores and consumers revert to single-use plastics as a health measure. As with so many other infrastructure challenges, plastic recycling now seems beyond America’s capacity to solve.

SIP, however, believes it has a solution. The company has invested in a startup called AMP that claims its technology can perform recycling featsthat others cannot. SIP plans to build a facility in the Midwest that will obtain cast-off plastic from nearby recycling plants, and then sort it with AMP’s robotic arms and artificial intelligence software. SIP says its planned sortation plant will yield plastic that it will sell to the likes of Coca-Colaand Procter & Gamble—big, plastic-dependent companies that have pledged to reduce their environmental footprint.

The plastic venture is part of SIP’s quest to build a “circular economy”—a term popular in environmentalist circles that refers to incorporating trash and waste water into the production cycle. The circular economy is one of the four infrastructure priorities SIP is pursuing. The others revolve around transportation and mobility—particularly autonomous vehicles—as well as energy and digital infrastructure.

In every case, Winer says SIP’s approach is the same: The company identifies an infrastructure need, and then spends months developing a master plan to deploy a mix of technology and physical assets to solve it. Crucial to SIP’s approach, he says, is its network of influential people—such as Coke and P&G executives. “Once we have a thesis, we act as a convener. We bring together groups of people, including technologists, Alphabet executives, traditional infrastructure players and policy makers,” Winer says.

Over the long run, SIP plans to use the same playbook to spur inter-city highways for driverless cars or, in the case of digital infrastructure, build out network and storage capacity to bring highspeed Internet to both rural and urban communities.

The plan is an ambitious one, perhaps even a noble one. It is also fraught. To understand the perils, Winer and Barlow can look to the troubles of their former employer, Sidewalk Labs. Like SIP, its spinoff, Sidewalk Labs touted think-big ideas to transform the modern city with tools like sensors and data analytics. When it came to deploy Sidewalk Labs’ vision in the real world city of Toronto, however, the project became mired in political wrangling and a pushback from citizens fearful of Google gobbling their data. Today, the project is moving forward but so far it has done little to transform Toronto. Update: On May 7, Google announced it would abandon the project.

A new approach to building infrastructure

Winer is very much aware of the political headwinds that Sidewalk Labs has encountered, but believes SIP’s approach can overcome them. For starters, he says the company is not trying to offer up futuristic versions of the city, but rather to identify infrastructure that towns already need, and then help to build it. In many cases, this will be in the form of unglamorous—but sorely needed—facilities like those sorting plants for recycling.

Winer adds that SIP is taking care to consult mayors and other local officials about their needs, and does not engage in lobbying. “We’re not trying to sell our widgets,” he says, stressing that company is playing a very long game.

SIP also cites its unusual corporate structure as an asset. The company does not fit within the traditional business ecosystem of tech, which is driven by startups focused on a narrow set of products or services. Those startups are in turn funded by venture capital firms, which amass large funds of capital from investors who typically anticipate a return within seven years. This structure incentivizes startups to grow at a breakneck pace as their VC backers press them to achieve an “exit” by being acquired or going public.

Winer says that SIP, as a holding company, is set up to build and invest over a longer timeline and that its two large investors will not be pressing it to deliver returns in the near future. The holding company structure also affords SIP a greater degree of flexibility than other tech firms, allowing it to both acquire assets—like the Midwest sorting plant—and also invest strategically in startups that complement those assets. SIP also plans, in many case, to help operate the companies it backs.

Currently, SIP has 15 full-time employees, including finance veterans like Winer and Barlow, as well as data scientists and technologists. The company expects its ranks will grow over the next year.

As for delivering returns to Alphabet and Ontario Teachers, Winer says the timeline is longer than in the venture capital world but also not infinite. “We don’t have a timeline for liquidity or a return by date X, but we’re not doing 20 year science projects. It’s multi-year not multi-decade,” he says.

Like everyone else, SIP did not anticipate the coronavirus crisis, though Winer believes the company may be able to accelerate its mission as Americans reassess their priorities in the pandemic’s aftermath. And indeed the crisis appears to be creating a new political energy for tackling longstanding problems. In Italy, for instance, officials in Milan are pursuing a plan to limit air pollution by converting 22 miles of roads into cycling and pedestrian routes. Meanwhile, in New York City, some are calling for a massive upgrade of crumbling subway and highway system while the city is in partial lockdown.

All of this suggests that it may indeed be “Time to Build”—and SIP is ready.

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Beanfield Metroconnect Logo

Digital Colony Announces Strategic Recapitalization of Beanfield Metroconnect

May 6, 2020–

Digital Colony, the global digital infrastructure investment platform of Colony Capital, Inc. (NYSE: CLNY), today announced a strategic recapitalization of Beanfield Metroconnect (“Beanfield” or the “Company”), an independent telecommunications infrastructure provider in Canada. In connection with this transaction, the Company has acquired the metro network of Aptum Technologies (“Aptum”), a global hybrid cloud and managed services provider.

The strategic recapitalization includes C$255 million of financing, positioning Beanfield to capitalize on a variety of new segment and revenue opportunities. Through the acquisition of Aptum’s metro network, Beanfield will enhance connectivity services and fiber solution capabilities in Toronto while expanding its presence in Montreal following the recent acquisition of regional telecom fiber services provider OpenFace Inc.

In partnership with Digital Colony, Beanfield has significantly scaled its platform to seamlessly connect individuals and businesses in Canada’s two largest urban markets. Since Digital Colony made a substantial investment in 2019, the Company has grown its network footprint ten-fold from approximately 400 route KM to more than 4,000 across both markets. The Company’s ability to service on-net buildings has also increased almost six-fold from approximately 550 buildings to 3,200 buildings.

“This transaction exemplifies our approach to underwriting and our commitment to fostering growth in exceptional businesses with strong management teams,” said Steven Sonnenstein, Managing Director at Digital Colony. “Today’s recapitalization underpins our confidence in the continued opportunities for growth that result from the unrelenting focus on the customer experience and high quality services that are at the core of Beanfield’s business.”

Leveraging existing relationships with leading institutional lenders, Digital Colony secured the financing, which includes a first lien term loan and a revolving credit facility. TD Securities served as joint lead arranger, joint bookrunner and administrative agent, while RBC Capital Markets and SunTrust Robinson Humphrey served as joint lead arranger and joint bookrunner.

Sadiq Malik, Managing Director at Digital Colony, added, “We appreciate the support of our lenders, who didn’t hesitate to provide this crucial financing despite the challenging market. Through this strategic recapitalization, Beanfield has added financial flexibility and is positioned for continued growth in its markets.”

“In today’s environment, the need for connectivity has only grown as networks experience unprecedented demand,” said Dan Armstrong, CEO of Beanfield Metroconnect. “At Beanfield, we have always invested in building communities – not just networks. We expect our employees, customers and valued partners in Canada’s two largest regions will see numerous benefits from this strategic recapitalization as we expand our offerings and increase our investment in robust fiber networks.”

About Digital Colony

Digital Colony is the world’s largest digital infrastructure investment firm with over US$20 billion in assets under management. Launched in 2018 by Digital Bridge and Colony Capital, Digital Colony brings together Digital Bridge’s industry, operational and investment expertise, and Colony Capital’s (NYSE: CLNY) global operating platform and capital markets access. Digital Colony is a leading investor, owner and operator enabling the next generation of mobile and internet connectivity through investments in mission-critical infrastructure around the globe. Headquartered in Boca Raton, Florida with offices in New York, Los Angeles, London and Singapore, the firm closed its first discretionary fund dedicated solely to investing in digital infrastructure with US$4.05 billion in commitments in 2019. For more information, please visit www.digitalcolony.com.

About Beanfield Metroconnect

Founded in 1988, Beanfield is a privately held and 100% Canadian-operated company. Beanfield provides comprehensive telecom services to over 3,200 commercial and residential buildings and operates four boutique colocation facilities at key connection points within its fiber network. The company is facilities-based, maintaining and managing its own in-house construction and fiber maintenance teams. Beanfield’s residential services include Fiber-to-the-Suite Internet, TV and Home Phone. Its business services include Fiber Internet, Business Phone, TV, Dark Fiber, Private Line and Colocation. Beanfield is a portfolio company of Digital Colony, a global investment firm dedicated to strategic opportunities in digital infrastructure. For more information visit www.beanfield.com.

Digital Colony Expands in LatAm With Brazilian Data Center Deal

By Nabila Ahmed April 22, 2020, 9:00 PM PDT

SOURCE: Bloomberg

Colony Capital Inc.  investment arm Digital Colony Management is expanding in Latin America with the purchase of data center assets from Brazil’s Grupo Folha, at a time when stay-at-home orders around the world are boosting demand for digital infrastructure.

The assets, from the UOL Diveo unit of Folha, will form a new Sao Paulo-based data center platform led by former IBM executive Marcos Peigo, said Digital Colony Chief Executive Officer Marc Ganzi, who is due to take on the top job at Los Angeles-based Colony Capital in July. The new platform, Scala Data Centers, will be one of the largest of its kind in Brazil and will seek to grow through acquisitions, Ganzi said.

“The situation in Latin America is no different to the situation here — companies are asking employees to work from home and in addition to that, cloud growth in Latin America is significant and we have a huge opportunity to deploy capital behind some of our best relationships in the region,” Ganzi said in an interview.

The transaction values the assets at $300 million to $400 million, according to a person with knowledge of the matter who asked not to be identified because the acquisition price isn’t public. Ganzi said the companies had been discussing the deal for about a year and most of the due diligence and negotiations were completed before the world went into lockdown mode.

The transaction will be funded partly with equity from Digital Colony’s inaugural fund, Ganzi said. The transaction follows Digital Colony’s purchase of Highline do Brasil last year. In the U.S., the company was part of a consortium that last month completed one of the largest leveraged buyouts of 2019, with the $14.3 billion purchase of fiber network owner Zayo Group Holdings Inc.

The digital infrastructure sector is a rare bright spot as the global coronavirus pandemic upends markets, threatens industries from airlines to retail and curtails dealmaking. Digital Colony serves customers including telecom and broadband providers as well as internet content giants, which are all riding a rise in demand as people work from home, try to home-school their children and entertain themselves with platforms such as Netflix.

“There have been two core thematics in the last 30 days — customers are asking for more broadband capacity and there’s been continued growth in cloud computing because of growing demand” from big tech players, Ganzi said.

cell tower against sunset

Mobilitie Receives $325 million Financing for 5G Infra Deployments in the US

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SOURCE: FastMode

CIT Group recently announced that its Technology, Media and Telecommunications unit has arranged $325 million round of financing for Mobilitie, the largest privately-held telecommunications infrastructure company in the United States.

This is the third financing round that CIT has led in recent years on behalf of Mobilitie, which owns and operates a national portfolio of wireless communications infrastructure, including towers, distributed antenna systems and wi-fi networks. Proceeds will refinance existing debt and provide growth capital for its ongoing 5G network deployments and upgrades.

CIT’s Technology, Media and Telecommunications group supports the development, expansion, equipment, and strategic acquisition needs of clients in the telecommunications, technology, media and information services industries.

 

Christos Karmis, President and CEO, Mobilitie
CIT has worked with us for years as we’ve expanded our infrastructure to support a wide range of telecommunications needs, working closely with large public venues, real estate owners, large enterprises, and wireless carriers to ensure their customers are better connected.

Thomas Westdyk, Managing Director and Group Head, CIT’s Technology, Media and Telecommunications Business
CIT is pleased to lead another round of financing to support Mobilitie’s ongoing operations and development, particularly in this time when wireless networks are so critical.

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