Publicly traded CBRE Group has acquired Direct Line Global, a provider of data center infrastructure services, from Guardian Capital.
Direct Line Global (DLG) provides consultation, design and installation services for data centers, mixed-use facilities, and server rooms including network infrastructure, fiber optic installations, and outside-plant cabling. Post-installation, the company provides management services including maintenance, technology upgrades, retrofits, and day-to-day operational support.
DLG, led by CEO Bill Nelligan since September 2020, employs over 1,200 technicians and engineers, managing more than 1,000 projects annually. Established in 1997, the company is headquartered near San Francisco in Fremont, California, and has additional facilities in the United States (7), Europe (6), and Asia Pacific (4).
Guardian acquired DLG through its second fund in February 2018 in partnership with the company’s co-founders John Friesen and Ignacio del Rio. “DGL has achieved significant and diversified growth in a demanding data center market. Guardian’s partnership was instrumental in fostering our evolution of the business and we look forward to continuing this growth under CBRE’s ownership,” said Mr. Nelligan.
“During Guardian’s ownership, DGL invested to scale its platform, including operations and delivery, data center services offerings, geographic market expansion, and partnership with blue-chip customers,” said Scott Evans, a founding partner of Guardian. “The company is well positioned to meet the increasing demand for data center services. I am proud of the exceptional performance of the management team and look forward to seeing the company’s future success under the ownership of CBRE.”
“We see huge benefits from operating as part of CBRE,” added Mr. Nelligan. “Our business has strong momentum, driven by the economy’s voracious appetite for data and artificial intelligence’s explosive growth. We are particularly energized about the opportunities that CBRE’s preeminent global platform will afford us for overseas growth.”
According to CBRE, the global market for data center support services is estimated to be approximately $30 billion and is expected to grow at 16% per year through 2028.
“This acquisition fits squarely with our strategy of enhancing our capabilities in asset classes that benefit from secular tailwinds – in this case, the increasing digitization of the global economy,” said Vikram Kohli, the chief operating officer of CBRE. “Direct Line Global perfectly complements our existing data center management capabilities and provides us with best-in-class technical capabilities that differentiate our service offering.”
Dallas-headquartered CBRE Group (NYSE: CBRE) is one of the largest commercial real estate services and investment firms with more than 130,000 employees and approximately 450 offices worldwide. CBRE’s services include facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; consulting; property sales; mortgage services and development services. Post closing, DLG will operate as part of CBRE’s Data Centers Solutions business.
The acquisition of DLG follows CBRE’s February 2024 acquisition of J&J Worldwide Services, a Tennessee-based provider of facility maintenance services and operations support at military bases and hospitals, from Arlington Capital Partners for $800 million in cash (plus a potential earn-out of up to $250 million) at a 12.3x 2024 EBITDA valuation. More than a year ago, in November 2022, CBRE acquired Full Spectrum Group, a California-based provider of repair, maintenance, and validation services for laboratory instrumentation, from Pfingsten Partners for $110 million.
Guardian Capital makes control investments in lower middle-market private companies located primarily in the United States that have annual revenues between $20 million and $120 million and EBITDA between $4 million and $15 million. Sectors of interest include consumer products, niche manufacturing, and specialty business services. The firm is headquartered in the Philadelphia suburb of Wayne, Pennsylvania.
Lincoln International was the financial advisor to DLG on this transaction.
© 2024 Private Equity Professional | June 20, 2024
