Our financial and economic expertise gives us the ability to forensically examine technology acquisition opportunities for clients. This knowledge enabled us to advise a leading European investment manager in the acquisition of a stake in a major Benelux digital infrastructure provider operating a range of fibre-optic networks and data centres.

The data centre infrastructure and fibre offer included an established B2B network with dark fibre spare capacity, providing investors with access to a large, digital infrastructure operator providing connectivity solutions for telecom and enterprise customers. 

Our buyside client appointed us to provide detailed transaction advice. To facilitate the purchase of a minority stake in the firm, we carried out a range of due diligence audits including technical, operational, and Environmental Health & Safety assessments.  

Technical due diligence: An integrated approach to complex asset assessment

To assess the opportunity, we brought together a team of specialists from across Europe. Combining rigorous insights and technical expertise, we aligned experts from economists and regulatory experts to data centre designers, risk and resilience managers and operational performance specialists to help our client evaluate the complex range of assets. 

With a presence in four countries, the provider operates in a relatively complex environment where their connectivity services can be supported by different fibre products. Each of these have differing degrees of service complexity and market competition, including dark fibre, wavelength division multiplexing (WDM), ethernet and internet, and managed services.  

For Data Centre and Cloud Services, the existing infrastructure supports numerous services including Data Centre Colocation, (‘carrier hotels’ which provide equipment, space and bandwidth for rental) and consumer-facing cloud services like Infrastructure as a Service (IAAS) and Platform as a Service (PAAS). 

Our team took an integrated, iterative approach, evaluating assets and reporting across the different business areas in under six weeks. This combined approach allowed our client to evaluate risk areas and transaction structures to arrive at a fair valuation.

Buy now – Pay later?

To evaluate the active equipment lifecycle, we assessed the condition, capacity, operation and maintenance regime of the existing fibre network and data centres. Our team assessed the opportunities and challenges presented by potential 5G backhaul demand, where the best network infrastructure will future-proof providers against rising bandwidth demand.

Operational due diligence: unlocking further value

The team carried out an IT infrastructure review, mapping out both the operations and business support systems (OSS/BSS) and looking at network maintenance operations. Our team assessed the commercial aspects of the deal, examining existing contracts like SLAs, interconnection and termination agreements and evaluating the overall operating model and organisation including the capital expansion and upgrade programmes, strategic project cost assessment, procurement risks, CapEx and OpEx validation, and future growth assessments. 

Once those phases were complete, the team carried out an Environmental, Health & Safety audit, reviewing Health & Safety and environmental performance and procedures, evaluating EHS reporting to include carbon and efficiency, and providing an overview of relevant certification and compliance records.