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Fengate Asset Management is making a “ground-breaking” $1.8 billion investment into eStruxture Data Centers to provide the company with capacity to expand its nationwide network.
“The record-breaking investment is the single biggest to ever be made in the Canadian data centre sector and marks a pivotal moment in eStruxture's strategic growth,” the companies state in the Wednesday morning announcement. “The investment will enable the expansion of eStruxture's portfolio of 15 state-of-the-art facilities nationwide to meet the demand for data centre capacity.”
The investment significantly expands Fengate’s equity stake in eStruxture and expands a longstanding partnership between the two firms. The investment includes new capital from a group of institutional secondary investors co-led by global private markets firm Partners Group, and Pantheon, a specialist global private markets and secondary investor.
Fengate is investing on behalf of its Fengate Infrastructure Fund III, Fengate Infrastructure Fund IV and affiliated entities, including an investment by LiUNA's Pension Fund of Central and Eastern Canada. LiUNA is one of Fengate’s major investment partners, and has stakes in a wide range of the firm’s initiatives.
Jonathan Wener and the Wener Family Office, along with Todd Coleman, founder, president, and CEO of eStruxture, and the accompanying management team, will also reinvest a significant portion of their holdings in eStruxture.
"For years, Fengate has had a front-row seat to the meteoric success of eStruxture, and that intimate perspective gives us full confidence to continue our relationship through this next exciting growth phase," Lou Serafini Jr., president and CEO at Fengate, said in the announcement.
eStructure has data centres in 4 Canadian cities
eStruxture is the largest Canadian data centre provider with locations in Montreal, Toronto, Calgary and Vancouver.
Headquartered in Montreal, eStruxture provides infrastructure and support services to approximately 1,000 clients including carriers, cloud providers, media content, financial services and enterprise customers. eStruxture offers colocation, bandwidth and security services in its carrier and cloud-neutral facilities.
"This partnership with Fengate marks a transformative moment for eStruxture,” Coleman said in the announcement. “It not only reflects our shared commitment to advancing Canada's digital landscape but also positions us to lead in delivering highly scalable and sustainable digital infrastructure solutions that will empower businesses across Canada and beyond."
As major technology players expand their cloud regions across Canada and AI and machine learning become integral to business operations, eStruxture says it is positioning itself to meet these needs. This investment is intended to accelerate eStruxture's hyperscale growth, providing a launch pad for “transformative expansion” the announcement states.
"eStruxture is paving the way for Canada's digital infrastructure sector," George Theodoropoulos, managing partner at Fengate, said in the announcement. "Digital is a sector focus for our infrastructure business and increasing our investment in eStruxture is an exciting and significant step toward realizing our digital infrastructure strategy."
"The eStruxture team is truly best-in-class,” Wener added in the announcement. “Eight years ago, eStruxture was nothing but an idea. Today, we are Canada's leading data centre platform. Notwithstanding all we have accomplished, we believe the best is yet to come.”
DH Capital, a division of Citizens and Scotiabank served as eStruxture's financial advisors; Davies Ward Phillips & Vineberg as legal advisor; and KPMG as tax advisor. Campbell Lutyens served as Fengate's exclusive financial advisor; Kirkland & Ellis and Stikeman Elliot as legal advisors; and Leo Berwick as tax advisor.
About Fengate
Fengate is a Toronto-based alternative investment manager focused on infrastructure, private equity and real estate strategies, with $8 billion of capital commitments under management.
With offices in Canada and the United States, Fengate calls itself one of the most active real asset investors in North America. The firm has been investing in infrastructure since 2006, with a focus on mid-market greenfield and brownfield assets in the transportation, social, energy transition and digital sectors.
Fengate leverages its long-standing relationships with design-builders, operators and developers to source, develop and manage infrastructure investments across North America on behalf of its clients.
The firm has an extensive track record as an investment and development partner across the sectors in which it operates and an infrastructure project portfolio of more than 45 assets valued at over $20 billion. www.fengate.com.
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