Digital Bridge Conducts The Initial Part of the Databank Recapitalization

Digital Bridge noted on an earlier investor call that it would move forward with the Databank recapitalization.

Databank is a edge data center platform. Let’s look at edge data center platforms, why they are important and how they make a difference today. We will also look at what a recapitalization is and why a company would move forward with a recapitalization.

What is a Data Center?

A data center is an area where organizations will centralize their collective IT activities and related devices to store, process, and distribute data and applications. 

These data centers are important because they serve as a key place that will have the firm’s very important and critical digital assets. These data centers help to power organizations on a regular basis.

There are several types of data centers:

 

Corporate data centers

Computer infrastructure as a service (web hosting)

Data centers that offer comprehensive solutions

Data centers that can provide more capabilities such as bridging to web 2.0

 

Data Centers May Face a Few Issues

An interesting point here is that data centers are facing a few issues due to heatwaves and droughts. As you now know, these data centers are critical and if they face issues, companies would need to figure out how to minimize these risks.

These digital information houses are part of a significant business sector. At the same time, they are known to require a greater deal of electricity. They also need to have a certain amount of water to minimize problems that may arise from overheating. There are additional infrastructure elements that local utilities must account for due to cooling these systems.

It is a tricky situation because computing needs will continue to rise over the next decade. We might even say that these computing needs will grow at a more alarming pace.

If that is the case, and we will have the same infrastructure, data centers, to store the data. Then, it would follow that we would have to have more water resources to allocate, or we will need to innovate to where we can contain much more data per data center.

It can be very concerning if it current water trends and drought periods last over the next decade. Reports indicate that watersheds are already under significant pressure.

Now that you understand more about data centers and a few other aspects related to them, let us take a look at edge data centers.

What is an edge data center?

Edge data centers are medium sized or smaller data facilities that are present near to the edge of a particular network. They have similar components as you would find in other regular data centers. The idea with these smaller footprint centers is to deliver the information as quickly as possible due to level of proximity. These edge data centers will be crucial

 

What is a Recapitalization?

In a recapitalization, companies will seek to restructure the company debt and ownership position to ensure that the company is able to ensure stability in the capital setup. The system will usually require switching out one type of financing for a different one.

In this case, the firm is selling a portion of its ownership position to other investors to raise cash. Digital Bridge expects to generate $1.5 billion from the transaction. The firm will net up to $318 million. 

DigitalBridge will also see a lower equity position with only 13%. The firm invested in DataBank initially in late 2019.

Again, this is a necessary sector and the right firms that understand market demand, the assets that will have value and will increase in value over the long-term, and can purchase it at the right price, will see considerable strength.