Digital infrastructure investor DigitalBridge is acquiring energy investor ArcLight Capital Partners.

Announced this week, DigitalBridge has entered into a definitive agreement to acquire ArcLight for a total transaction value of up to $1.05 billion.

The deal includes a base purchase price of $650 million, plus up to an additional $400 million of contingent consideration.

“The combination forms a leading alternative asset manager at the convergence of power, AI, and digital infrastructure, bringing together two specialist platforms with combined assets representing more than $150 billion,” the companies said.

“Digital infrastructure is a specialist business, and ArcLight has operated with that same philosophy in power infrastructure for more than two decades, building deep expertise across power, renewables, batteries, transmission, and midstream infrastructure,” said Marc Ganzi, DigitalBridge CEO. “Together, DigitalBridge and ArcLight will help create a scaled infrastructure platform positioned for that convergence.”

Founded in 2001, ArcLight has owned, controlled, or operated more than 70GW of generation assets and 48,000 miles of electric and gas transmission and storage infrastructure, and claims a pipeline totaling 15GW. Its investments include natural gas plants, hydroelectric capacity, solar farms, battery storage systems, and natural gas pipelines.

After the deal closes, ArcLight will operate as a separately managed business as part of the DigitalBridge platform. ArcLight founder Daniel Revers will serve as vice chairman of DigitalBridge and ArcLight managing partner Angelo Acconcia will remain in his role to continue day-to-day leadership of the firm.

“I founded ArcLight in 2001, as one of the first dedicated power infrastructure investment platforms, and more than two decades later we are taking another significant step toward building a platform for the growing convergence of power, AI, and digital infrastructure,” said Revers ArcLight. “By combining ArcLight’s deep experience across power infrastructure with DigitalBridge’s global digital infrastructure platform and longstanding relationships across the hyperscale ecosystem, and SoftBank Group’s broader technology and AI leadership, we believe the combined platform will be well positioned to support the next generation of infrastructure development.”

The transaction is conditioned upon completion of SoftBank Group’s acquisition of DigitalBridge – which the companies said will not be impacted by the ArcLight deal.

Earlier this year, ArcLight acquired a 50 percent stake in a portfolio of 11 dispatchable power generation assets located across North America and totaling 5.4GW from DigitalBridge’s InfraBridge division (previously known as AMP Capital’s infrastructure business).

DigitalBridge and ArcLight both invested in Takanock last year. The firm aims to develop behind-the-meter data center projects.

The firm closed its ArcLight Infrastructure Partners Fund VIII in April with $3.9 billion in total commitments.

DigitalBridge is a major investor in data centers, fiber, and cell towers, with some $115 billion in assets under management across more than 45 companies. Companies under DigitalBridge's ownership include Vantage, Switch, DataBank, Takanock, AtlasEdge, Scala, Yondr, AIMS, JTower, Zayo, VerticalBridge, and others.

Barclays is acting as the financial advisor and sole committed financing provider to DigitalBridge. Simpson Thacher & Bartlett LLP is serving as legal counsel to DigitalBridge, along with Morgan, Lewis, & Bockius as regulatory counsel. Morgan Stanley & Co. LLC is serving as financial advisor, and Kirkland & Ellis LLP is serving as legal counsel to ArcLight. Sullivan & Cromwell LLP is serving as legal counsel to SoftBank Group, along with Morrison & Foerster LLP and Covington & Burlington LLP as regulatory counsel.