Providence seeks $3 bln for EdgeConneX

Providence Equity’s sale of infrastructure services provider EdgeConneX is in second round, two sources familiar with the process told Buyouts.

Bids were due a few weeks ago, one source said.

Evercore is advising the company on its sale, the people said.

The process, which kicked off nearly five months ago, has taken time because of significant price expectation, the people said. Providence is looking to fetch nearly $3 billion for EdgeConneX, one source said.

EdgeConneX, based in Herndon, Virginia, provides connectivity services to enterprises, including cable and software companies, through its data centers.

The company said it is aiming to improve quality and speed of digital connection by situating its data centers in areas where customers are consuming content and businesses are consuming cloud services, according to the company’s official website.

On the telecom side, EdgeConneX  partnered with Charter, Cox, Comcast, while in the software space, the company  partnered with Microsoft, Google and Amazon.

EdgeConneX generated nearly $125 million in Ebitda, according to one source.

Valuations in the data center services and connectivity space have risen in the past year with a wider adoption of 5G connection and rapidly growing volume of data transmission, according to a source with the knowledge of the space.

This price environment presents a good opportunity for a private equity exit from such investments, the person said.

In May, TierPoint, a data center provider backed by TA Associates and Ontario Teachers’ Pension Plan, was said to be seeking an investor.

Providence Equity and Evercore declined to comment. EdgeConneX did not return request for comment. The company has previously denied reports that it is for sale.

Action Item: Check out this video about EdgeConneX under Providence’s ownership.