We assisted Star Capital with vendor commercial and technical due diligence during its successful sale of a majority stake in Datacenter One (DC1)

The problem

• Star Capital, an investor focused on the telecoms space, was interested in selling its majority stake in Datacenter One, the German data-centre provider with facilities in Stuttgart, Leverkusen and Düsseldorf
• From the early stages of the project Analysys Mason was engaged to provide support on the commercial and technical vendor due diligence, with the aim of giving potential investors a clear view of Datacenter One’s business, growth opportunities and risks, and attracting a potential buyer

The solution

• We conducted a comprehensive review of the German market dynamics, including supply and demand drivers by city to assess the consistency and validity of the firm’s business plan projections
• As part of the commercial due diligence, we assessed the market, the firm and its facilities at city level, providing a granular view of the individual characteristics affecting each of its business operations
  • we provided extensive support in the form of customer referencing, expert interviews and management meetings, to help us form a clear view on Datacenter One’s positioning 
• The technical due diligence included a review of certifications and performance against SLAs,¹ and an assessment of Datacenter One’s modular build approach, energy provisioning and the connectivity status of the portfolio
• This was complemented with site visits to provide comfort on the asset quality, expansion capabilities and capex requirements

Figure: Analysis of market dynamics across City 1

The result

• The Analysys Mason team presented the results of our work to Star Capital, which was able to use these to support its sales negotiations
• Star Capital received an offer for its majority stake from AtlasEdge soon after our engagement, which was accepted in October 2022

¹ Service-level agreements