Exa Infrastructure is to acquire subsea cable operator Aqua Comms.

The network firm, owned by investment firm I Squared Capital, announced today (January 17) that it has signed binding agreements to acquire Aqua Comms from D9.

D9 disclosed the net proceeds of the transaction to be $48 million, noting the final amount to be "extremely disappointing."

subsea cable
– Getty Images

Aqua Comms was previously backed by UK infrastructure fund Digital 9 Infrastructure, which is currently in the process of winding down and selling off its assets. D9 acquired Aqua in 2021.

Ireland-based Aqua Comms operates submarine cable systems and supplies fiber pairs, spectrum, and wholesale network capacity to the global content, cloud, carrier & enterprise markets.

The company owns and operates America Europe Connect-1 (AEC-1), America Europe Connect-2 (AEC-2), CeltixConnect-1 (CC-1), and CeltixConnect-2 (CC-2) and is part of a consortium that owns/operates the Amitié cable system (AEC-3).

“The acquisition of Aqua Comms demonstrates Exa Infrastructure’s commitment to build a modern and diverse Transatlantic platform to fully serve AI, cloud, and content demand, now and in the future. The combination will offer our customers more routes, more capacity, and increased diversity, all on a scaled platform” said Jim Fagan, chief executive of Exa Infrastructure. 

Exa said the planned acquisition is expected to take around a year to complete, and will be subject to customary closing conditions.

Exa operates more than 150,000km of digital infrastructure across 37 countries, including 20 cable landing stations that provide critical connectivity to subsea systems.

Akur Capital and RBC Capital Markets are acting as financial advisors to EXA Infrastructure, while Paul, Weiss, Rifkind, Wharton & Garrison are serving as legal M&A advisors to EXA Infrastructure.

"Extremely disappointing"

Eric Sanderson, chairman of Digital 9 Infrastructure plc, added: "While the pricing outcome for Aqua Comms is extremely disappointing and less than might have been expected for the Company, a complete and far-reaching auction process has been run over a period of nine months, to fully market test the value of this business. Given the current market conditions and business specific factors, we are confident this Transaction represents the best option for shareholders in the context of the orderly wind-down."

Goldman Sachs is serving as financial advisor to D9, while Shoosmiths is serving as legal advisor to D9.

D9 has only been in operation for four years. In March 2021, investment firm Triple Point raised £300 million ($365m) from an IPO through D9, with plans to acquire a number of digital infrastructure firms.

However, D9 announced in February of last year that it had decided to wind down its operations and sell off its assets following a strategic review.

In October, the company appointed InfraRed Capital Partners as its new investment manager to oversee the company’s wind-down, months after D9 sold its European data center firm Verne to Ardian.

At the end of December, D9 confirmed it agreed to sell its stake in EMIC-1 (Europe Middle-East India Connect) for $42m.

According to the company, the project "continues to be impacted by ongoing conflicts in the Red Sea area, which have led to an indefinite delay to its final construction completion."

D9 expects the transaction to close in March, and notes that the deal releases the group from $10m of additional construction commitments.