Digital Realty lifts Teraco stake to 77% in $688M deal
What's the deal? Digital Realty has acquired a further 16% stake in TeracoDealroom has a profile for this one. Try Dealroom →, the African carrier- and cloud-neutral data center provider, for approximately $688 million. The US-based real estate investment trust bought the shares from certain minority investors, lifting its ownership from 61% to about 77%. It paid principally by issuing 3.4 million shares of common stock.
Why now? The purchase was triggered by minority shareholders exercising put rights after the close of Digital Realty's third quarter. Funding the deal mainly with stock limits the cash outlay as the company presses ahead with other investments.
What's the endgame? Teraco operates eight data center locations in South Africa, with most of its activity in Johannesburg. The deal converts a long-standing partnership into greater control of a carrier-neutral connectivity platform in the continent's leading data center market.
By the numbers: Digital Realty reported third-quarter revenue of $1.9 billion, up 21% year over year, with net income of $194 million. Record bookings are expected to generate $627 million of annualized rent at its share, and its signed-but-not-commenced backlog reached a record $2.5 billion at 100%. The company raised its 2026 core funds from operations guidance to $8.30–$8.35 per share.
What could go wrong? South Africa is drawing rival investment from Vantage, Equinix, and Open Access Data CentresDealroom has a profile for this one. Try Dealroom →, intensifying competition. New leases also carried a weighted-average commencement lag of 17 months, delaying revenue from recent wins.
"These results underscore the global strength of customer demand for connectivity-rich environments," said Andy Power, Digital Realty president and chief executive officer.
The signal: Deeper ownership of Teraco gives Digital Realty a larger foothold in Africa's fastest-growing data center market as demand for connectivity-rich infrastructure strengthens worldwide.
Read more: w.media
Image credit: U.S. Army Combat Capabilities Development Command
