Singapore-headquartered data centre operator Digital Edge has snapped up two data centres in South Korea in a major deal with Sejong Telecom, one of the country’s largest telco carriers.
Specifically, Digital Edge has entered into a definitive agreement to acquire Sejong Telecom’s data centre assets in an all-cash transaction. Between the transaction and subsequent expansions of the assets, Digital Edge expects to invest over US$120 million.
As part of the transaction, Sejong Telecom and Digital Edge have also entered into a long-term strategic partnership to bring innovative products and services to the marketplace to meet the expectations of both domestic and international customers.
When the deal closes, Digital Edge will acquire one data centre in Gangnam, Seoul and a cable landing station facility in Centum City, Busan.
The addition of these strategic assets, including their associated operations and customers, marks the company’s initial entry into the Korean market and further strengthens its regional platform. The expansion comes as little surprise, given Digital Edge’s stated mission to acquire and develop carrier-neutral data centres and related digital infrastructure assets across the Asia Pacific region.
The company is quite new. It was revealed in August last year that US-based Stonepeak Infrastructure Partners, an infrastructure-focused private equity firm, and a group of senior executives formerly with Equinix, Facebook, Tata Communications and Macquarie, had formed Digital Edge as a “diversified, independent data centre platform”.
The new entity has deep pockets. Stonepeak, its investors and the Digital Edge management team together made a US$1 billion equity capital commitment to the platform.
With its headquarters in Singapore, Digital Edge is led by CEO Samuel Lee, who previously served as president of Equinix’s Asia Pacific business from 2005 to 2019, and aims to deliver innovative data centre and interconnect solutions in order to make customer deployments easy in complex, evolving environments.
The company also claims several individuals from Lee's prior senior team at Equinix among its current leadership ranks, including Kei Furuta, Andrew Rigoli and Jonathan Chou. The official formation of the company coincided with the closing of two initial investments in data centres in Japan, one of the platform’s key markets.
Now, the Singapore-based operator has added South Korea to its footprint, with the latest deal allowing Digital Edge to immediately offer interconnect and data centre solutions in the fast-growing Korean market and establish a solid foundation for future expansion in the two key metro areas of Seoul and Busan.
According to Digital Edge, Sejong Telecom’s data centres are strategically located and bring a wealth of connectivity options from existing customers. Digital Edge plans to invest additional capital to expand the capacity and improve the energy efficiency of both facilities.
“With our US$1 billion capital commitment to build the Digital Edge Platform in Asia, we are excited to announce the plan to enter into the Korean market, following our initial investments in data centres in Japan,” Lee said. “Korea is one of the fastest growing markets in Asia with the most advanced digital infrastructure.
“This transaction provides a great opportunity for multinational companies, as well as Korean businesses, to leverage Digital Edge’s platform to increase their digital footprint in Korea by interconnecting to a rich ecosystem of customers and partners in all key facilities in Seoul and Busan,” he added.
According to Yongsuk Choi, Digital Edge chief infrastructure and data centre operations officer, the acquisition of the strategic assets in South Korea will form a solid core for the company’s maturing regional platform.
“It will position Digital Edge as a credible and reliable data centre and interconnection service provider in South Korea, with high-quality assets from Seoul to Busan and a large, diversified ecosystem of Korean and multinational businesses,” he said. “Additionally, it opens key gateways for the rest of Asia through the submarine cable systems in the Busan area.”
The transaction is expected to close in the second quarter of 2021 and is subject to customary closing conditions and regulatory approvals.