Global investment management firm, Colony Capital, Inc., has acquired Digital Bridge Holdings LLC.
The company said it acquired the Digital Bridge for $325 million.
The acquisition is as part of its strategic evolution into the leading owner and investment manager of assets, businesses, and investment management products in which the digital and real estate frontiers intersect.
The Digital Bridge acquisition follows the May 2019 final closing of Digital Colony Partners, a $4.05 billion fund sponsored by Colony and Digital Bridge. Digital Colony Partners is dedicated to global opportunities in digital infrastructure and is the largest first-time institutional fund of this type.
Digital Bridge manages nearly $20 billion of digital infrastructure globally, directly and through Digital Colony Partners, and pro forma for Digital Colony Partners’ pending Zayo Group Holdings, Inc. transaction. Combining this portfolio with Colony’s footprint, the merged firm will manage approximately $60 billion of assets.
The company said it believes this concentration on digital infrastructure and related, digitally-driven investment management businesses will be a highly compelling strategy to generate substantial and sustainable value for shareholders and is very complementary to recent initiatives in other growth areas such as emerging markets, energy, and listed securities, often with a “new economy” emphasis.
The combination of the two companies also paves the way for Colony’s leadership succession plans, which will be implemented over approximately 18 to 24 months. Following a transition period, Marc C. Ganzi, a founder and Chief Executive Officer of Digital Bridge, and a Managing Partner and an Investment Committee Member at Digital Colony, will become the CEO of Colony, succeeding Thomas J. Barrack, Jr., who will return to the position of Executive Chairman. Mr. Ganzi will focus with Mr. Barrack and the Colony board and executive team to continue Colony’s strategic plan of selling non-core assets, reducing G&A, growing investment management, generating liquidity and de-risking, and maintaining REIT status and a dividend – the further details of which will be announced before year end.
Mr. Barrack said, “Colony Capital was founded to pursue value-added investment opportunities in real estate and real estate operating companies and has been a pioneer across a myriad of real asset cycles, geographies, and platforms. As our experiential world gives way to a new future – a data-driven world – real estate in its current format with long-dated contractual revenue streams from traditional tenants will have to change and adapt or face substantial obsolescence. Data-driven decisions, shared space utilization, ‘everything-as-a-service,’ new communications networks, and last-mile delivery systems, are examples of new technologies which will disintermediate everything in their paths. In fact, location, location, location is giving way to connect, connect, connect. This pivot presents a new investable frontier across the globe for those who are armed with the proper resources and experience.
“Nine months ago when I returned to the CEO position,” he continued, “part of our plan was to ensure that our leadership and direction of the Company was positioned for dominance for the next decade. I have known Marc Ganzi for over two decades and have admiringly watched his progression and success as an entrepreneur, visionary, and as the leading operator and investor in the digital world. Since Marc founded Global Tower Partners in 2002, he has been at the forefront of trends in the digital world, capitalizing on the overwhelming integration of mobile connectivity into the global economy and delivering remarkable returns for his investors in the process. He is an exceptional choice to lead our combined companies, investors, and employees as we accelerate, streamline, and cull other Colony business lines through sale or joint ventures and continue to reduce corporate costs. We will utilize the transition period to prepare Marc to assume the CEO role as he executes on our digital plan. Together we will continue to grow and expand our digital, credit, and investment management platforms while realigning and redirecting our hospitality and healthcare verticals.”
Mr. Ganzi said, “Tom Barrack has been prescient throughout his career in recognizing transformative opportunities, and as a result, Colony has always been a market leader. I have been working closely with Tom and many of the senior Colony executives as we raised and now invest the Digital Colony Partners fund, and I’m thrilled to combine our team with their powerful arsenal of operating and financial expertise, and the Colony balance sheet and fundraising channels, which will enable us to scale and stay ahead of trends in digital infrastructure. Our combined vision will focus on the reality that ever-larger numbers of people will use ever more devices, and the true explosion of use, driven by interconnected devices, cloud computing, mobility, big data, the internet of things, and especially the 5G roll-out, is still to come. Together as the new Colony, we are excited to bring these opportunities to investors.”