UK infrastructure fund Digital 9 Infrastructure is to wind down and sell off its assets.
The company has also said its previously-announced sale of Icelandic data center firm Verne Global is being delayed amid an extended investigation by regulators.
D9 to wind down
Following a strategic review started late last year, D9 has decided to wind down its operations and sell off its assets.
“Following careful consideration of the options available to the Company and after consultation with its financial advisers, as well as taking into account feedback received from a large number of shareholders and institutional investors, the Board has determined that it would be in the best interests of shareholders as a whole to put forward a proposal for a managed wind-down of the company,” D9 said late last month.
D9 said it plans to “immediately commence” sale preparations for the company's wholly-owned assets ahead of launching competitive processes later this year.
D9 has only been in operation for three years. In March 2021, investment firm Triple Point raised £300 million ($408m) from an IPO through D9, with plans to acquire a number of digital infrastructure firms.
As well as Verne, D9’s other investments include subsea cable firm Aqua Comms, UK terrestrial television and radio broadcasting network Arqiva, Irish broadband firm Elio (previously Host Ireland), a stake in the EMIC-1 cable linking southern Europe to India, and the SeaEdge UK1 data center & cable landing station in the UK.
Charlotte Valeur, Interim Independent chair of D9, said: "Throughout the strategic review process, the Board's primary objective has always been to maximize shareholder value going forward. Having carefully considered a number of options, we have ultimately concluded that a managed wind-down of the company is likely the best route to achieve this objective and seek to address the discount to NAV that impacts our shareholders.
She continued: “The board will assess the progress of the proposed asset sales on an ongoing basis and will continue to monitor other potential opportunities to realize income and capital value for shareholders as they arise. We will also continue to engage in active dialogue with our shareholders throughout this process."
However, in the wind-down announcement, the company said the board has decided to “defer a sale process” for D9's stake in Arqiva for the time being, as it is “likely to take longer than over investments” to maximize full value.
Verne sale to Ardian delayed
The sale of Icelandic data center firm Verne Global has been delayed amid a probe by regulators.
Digital 9 Infrastructure this week announced the Icelandic anti-trust authority has decided to open a "Phase II investigation" into its deal to sell Verne to French private equity firm Ardian.
Triple Point-owned D9 announced it was selling Verne to Ardian in November 2023. The terms of the sale were not disclosed – though reports suggest £465 million ($575m) – and the deal was originally expected to close by the end of Q1 2024.
The period for the Phase II investigation is up to 90 working days, which can be extended to 125 working days. D9 said, however, the Icelandic anti-trust authority is not obliged to use the full period to conclude its review.
D9 bought Verne for £231 million in 2021 ($320m at the time). Verne operates a 24MW data center campus on a former NATO site near Keflavik, Iceland, offering colocation and high-performance computing services.
Amid growing debt and a dropping share price, D9 initially said that it would sell a minority stake in Verne, but shareholders pushed for a total sale.
Prior to the sale, Verne had a five-year pipeline to expand the capacity of its data center campus in Iceland from the current 40MW to more than 96MW, which will require £390 million ($483.6m) in capital expenditure. The company secured a $100 million loan in June 2023 to fund its expansion plans.
The deal has already been unconditionally cleared by the Finnish Competition and Consumer Authority.