Data storage, a critical piece of the new digital economy, received a major boost in Latin America following the arrival in the region of technology infrastructure company Aligned Data Centers.
The Texas-headquartered company, which is jointly controlled by BlueMountain Capital Management and Macquarie Infrastructure Partners, closed an ambitious $1.225 billion deal across multiple jurisdictions in May to acquire Brazil’s ODATA and position itself as a leader in data management in the region, picking up assets not only in Brazil but also Chile, Colombia, Mexico, Peru and Uruguay. ODATA, developed by Brazilian investment firm Patria Investments, is among the fastest growing hyperscale data center platforms in Latin America.
Aligned CFO Anubhav Raj says ODATA checked all the boxes for the US firm’s first international acquisition; its financial profile made sense for Aligned.
“When talking to some of our key clients, we were getting feedback asking about ODATA. That definitely piqued our interest. We saw it as an excellent platform to expand our reach and create a pan-American platform,” he says.
The acquisition, which wins Digital Infrastructure Financing of the Year, makes Aligned one of the largest data center operators in the Americas, with more than 2.5 gigawatts of capacity in over 40 facilities once the expansion is complete.
“An integral part of winning the acquisition bid was really being able to pull together the financing,” says Raj. The deal was “a little bit of a hybrid, with elements of traditional project finance and unique characteristics that allowed us to get a little extra leverage.”
The acquisition financing employed an innovative hybrid structure, providing non-recourse, ring-fenced project financing with the full support of Aligned’s parent company guarantee to provide completion and full payment guarantee. This allowed Aligned to maximize the financing at closing while also providing the liquidity it needed for growth: the financing was originally for $1 billion but was upsized to $1.225 billion thanks to market appetite for the deal which became apparent between announcement and closing, Raj says.
The transaction, on which JPMorgan was financial advisor alongside Guggenheim Partners, envisaged an initial consortium of four lenders – Deutsche Bank, MUFG, Nomura and SMBC – but in the end was expanded to include BNP Paribas, Credit Agricole, Natixis and Societe Generale.
“We were able to get the size of the facility we wanted with flexibility to continue to grow the platform, where debt does not become an encumbrance on expanding,” Raj says. “It is important to be nimble and agile, when you have assets in different stages of development.”
In addition to the data facilities, Aligned will adopt ODATA’s ambitions for generating its own renewable energy: it had previously acquired a stake in a 212 megawatt wind farm that provides close to 90% of the power used for its Brazilian operations and intends to become green energy self-sufficient.
Sustainability has long been an imperative for Aligned. It was the first data center company to take out sustainability-linked financing, with a $1-billion senior secured credit facility; all other financings in the three years leading up to the ODATA acquisition was either sustainability-linked or green loans.
“There were lots of moving parts during the acquisition, but we made sure that we always had a clear ESG baseline, not just something that was status quo, but to advance what was already in our plans,” says Raj.
Banks: BNP Paribas, Credit Agricole, Deutsche Bank, MUFG, Natixis, Nomura, SMBC, Societe Generale, TMF
Law Firms: Claro & Cia, Garrigues, Guyer & Regules, Lefosse, Mijares, Paul Hastings, Posadas, Posse Herrera Ruiz, Rebaza, Ross PLLC, Skadden Arps, Stocche Forbes, Vinson & Elkins
Financial Advisors: JP Morgan, Guggenheim Partners
All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email firstname.lastname@example.org