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18 December 2019

Digital Colony makes its fifth acquisition this year, in Brazil

Digital Colony is an increasingly acquisitive and influential force in neutral host telecoms and cloud infrastructure. Formed from the merger of Digital Bridge, a tower operator, and real estate investor Colony Capital, it now has a global fund to buy and roll up related businesses round the world. It is bringing together players in many aspects of shared infrastructure in anticipation of a 5G-related boom, including operators of macro towers, small cell sites, edge clouds and indoor systems.

The latest to join its Digital Colony Partners group is Highline do Brasil II Infraestrutura de Telecomunicações (Highline), a towerco which has been acquired from local firm Pátria Investments for an undisclosed amount. The company’s portfolio of macro towers and other wireless infrastructure is present in all the major urban, suburban, and rural areas of Brazil and the company has all the country’s MNOs – led by TIM, Vivo, Claro and Oi – as customers.

“We are thrilled to partner with Highline as we enter the Brazilian digital infrastructure market. The company has a best-in-class asset base, multiple avenues for growth, and a talented and strong management team well-versed in scaling a tower platform,” said Steven Sonnenstein, managing director of Digital Colony. “As Brazilian MNOs increase their 4G coverage, seek to augment capacity in the country’s dense urban areas and prepare their networks for 5G deployment, there is a significant opportunity for Highline to grow. We look forward to expanding on what Pátria has built and to helping the business serve its customers.”

Highline CEO Fernando Viotti and his executive team will continue to lead the company. Viotti said: “Whether considering how to alleviate current capacity overload or strategizing how to meet the network demands of 4G/5G adoption, IoT devices and overall subscriber usage, Brazilian MNOs have made macrosite location availability their top priority moving forward. Our partnership with Digital Colony will allow us to expand our services ‒ including our flagship BTS program ‒ to meet the growing infrastructure needs of the country’s MNOs and offer new sites on which to deploy their equipment.”

Highline is the fifth acquisition this year. Last month, Digital Colony acquired a Canadian bandwidth infrastructure provider, Beanfield Metroconnect.

Among its interesting purchases in the past couple of years are indoor small cell specialists Stratto and OpenCell in 2018, and more recently city-focused company iWireless.

It also partnered with Swedish investment firm EQT Infrastructure IV Fund, to pay $14.3bn for US fiber and small cell provider Zayo, taking the firm into private ownership.

EQT itself has been a prolific dealmaker this year, having agreed to buy Germany fiber operator Inexio and Maltese operator Melita; and mounted a $2.27bn bid for Australia’s fourth telco, Vocus.

There is a natural fit between Zayo, which has deployed dense fiber focused on small cells and edge nodes, and Digital Colony’s multiple acquisitions to add data center capabilities to its core business in cell towers. The marriage of cell towers and edge nodes is expected to be a significant element in the edge compute patchwork.

Its other 2019 acquisitions were of Spyder Facilities, Cogeco Peer 1 and Digita.