Strategy & Practice Management
Digital Edge Completes its Largest Acquisition To-Date in Japan
Digital Edge (Singapore) Holdings Pte. Ltd. (“Digital Edge” or the “Company”), has announced the acquisition of five data center assets from Itochu Techno-Solutions (CTC) for a total purchase price of approximately USD230 million (JPY26 billion), representing Digital Edge's largest single investment in Japan to-date.
Through this transaction, Digital Edge has added a further 5,000 cabinets and 18.5MW of capacity to its Japan platform, bringing total MW capacity in Japan to approximately 38 MW. The five data centres are located in Tokyo, Yokohama and Kobe and as part of the transaction, Digital Edge has also acquired the underlying real properties in four of the five locations on which it plans to pursue new greenfield opportunities to support its growing retail and hyperscale business in Japan, Digital Edge said in a press release.
CTC, one of the leading IT services companies and a publicly listed company on the Tokyo Stock Exchange (code: 4739), will remain an anchor customer across all five data centers, and will work closely with the Digital Edge team to continue to grow the business at each of the facilities. Through the combined strengths of Digital Edge and CTC, enterprise customers will benefit from the ability to access both high quality data center infrastructure and world class IT & Cloud related services.
“Digital Edge is constantly looking for opportunities to continue expanding in Japan. Looking at the enterprise adaptation of cloud services and CTC's track record and reputation at delivering outsourced IT services, this strategic partnership is a win-win for not only CTC and Digital Edge, but also our customers,” said Samuel Lee, Chief Executive Officer of Digital Edge. “We are excited to deepen our long-term partnership with CTC and to continue supporting their long-term growth from customer demands.”
According to Structure Research, Tokyo's colocation market is expected to become a USD 3.4 billion market by 2026, growing at a 5-year CAGR of 9% between 2021 and 2026. Osaka's market is expected to become a USD 1.1 billion market over the same time horizon, with a 5-year CAGR growth of 21%[1]. Japan is focused on digital transformation, which drives high data usage due to the increased utilization of applications and platforms, such as data analytics, big data, and artificial intelligence (AI). This will in turn drive the demand for colocation and new capacity in the country's key data center clusters, particularly outside the Tokyo and Osaka metropolitan areas such as Yokohama and Kobe.
“These five data centres have been used by a large number of customers for many years. By collaborating widely with existing and new data centres of Digital Edge, CTC will be able to provide more advanced open hybrid cloud services to its customers. By leveraging Digital Edge's expertise in data center construction and operations, we are confident that this transaction and the synergy created thereby will accelerate growth opportunities for both parties,” says Eiji Haraguchi, Managing Executive Officer, Director of IT Services Business Group, CTC.
“Since Digital Edge's inception, we have been committed to investing in Japan's digital infrastructure to respond to the market demands in the greater Tokyo and Osaka regions. I am pleased to have this opportunity to crystallise a strategic partnership with CTC, as we look to continue operating, modernizing, and expanding these data centres with the latest technologies. The new capacity will further enhance our efforts to build ecosystems around all of our Japan data centres that are linked together by CrossLinkTM, our ultra high-speed connectivity solution,” said Kei Furuta, President of Digital Edge.
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