Digital infra megadeals: DigitalBridge to buy Switch for $11B, Radius for sale

Consolidation appears to be picking up steam among companies involved in the digital infrastructure space.

First, DigitalBridge announced an $11 billion agreement to take data center company Switch private, marking DigitalBridge's latest massive transaction in the space. Separately, a new report indicates Radius Global Infrastructure – which leases land to cell tower companies and mobile network operators – is considering strategic options including a sale.

The developments appear to build on a consolidation trend involving companies in the data center, fiber and cell tower industries, an area generally dubbed digital infrastructure. Recent similar transactions include cell tower company American Tower spending $10.1 billion to buy data center operator CoreSite Realty, and investment companies KKR & Co. and Global Infrastructure Partners LLC purchasing data center operator CyrusOne in a deal worth around $15 billion.

Figure 1: Meta's services typically run inside massive data centers.
(Source: Meta)

DigitalBridge's move on Switch comes shortly after the release of its first quarter earnings. In recent months DigitalBridge has been involved in all kinds of transactions involving companies in the digital infrastructure space, from fiber companies like Everstream to network deployment companies like Boingo to cell tower operators in Belgium.

Financial analysts largely cheered DigitalBridge's move on Switch. "DigitalBridge buys high quality assets and athletes to run them, and would likely give the founder and existing team at Switch the autonomy to maintain their brand and product set under a private umbrella unlike other PE [private equity] shops that would push for change and efficiencies," wrote the financial analysts at Raymond James in a note to investors this week.

Separately, Bloomberg this week reported that Radius' CEO is working with an adviser to seek potential suitors, including infrastructure investment firms. The publication cited unnamed people familiar with the matter.

Radius reported its first quarter results shortly after the report, but declined to discuss the situation.

"We believe any potential sale would require a very significant premium from current share price levels, especially considering that shares traded north of $18 as recently as November and the company just went public in February 2020," wrote the financial analysts at Raymond James of the Radius developments. "Moreover, we believe management and top shareholders see the significant long-term value creation potential, and think their view of intrinsic value is well above current share price levels."

Related posts:

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano