Alberta Investment Management Corporation (AIMCo) has announced it will increase its stake in Digital Colony-backed Highline do Brasil from 10.2% to 20%. Digital Colony acquired the company from Patria Investimentos in 2019.
(Dgtl Infra) Highline do Brasil, a portfolio company of I, today received additional backing from Canadian pension fund, Alberta Investment Management Corporation (AIMCo), which is increasing its stake in Highline from 10.2% to 20%.
Additionally, AIMCo intends to make a follow-on investment in Highline do Brasil of an undisclosed amount. In turn, this investment will increase AIMCo’s ownership in the company beyond 20%. Notably, Digital Colony will maintain control of Highline do Brasil upon completion of the AIMCo follow-on investment.
Highline do Brasil – Background
After acquiring Highline do Brasil from Pátria Investments in December 2019, Digital Colony has quickly scaled the platform to have 3.3k towers in Brazil. This growth was driven by bolt-on acquisitions, in November 2020, of Phoenix Tower do Brasil and Oi’s UPI Torres unit. Including pending build-to-suit (BTS) programs and towers which the company has marketing or management rights for, Highline’s portfolio will soon grow to 4.1k towers in Brazil.
Potential Use of Proceeds – Highline do Brasil
In 2021, Brazil is experiencing a surge in digital infrastructure M&A announcements. Specifically, BTG, CDPQ, and IHS (twice), are among the institutional investors actively deploying capital in the country. Moreover, there remains a significant pipeline of digital infrastructure opportunities, two of which could be potential destinations for AIMCo’s capital.
(1) Oi SA’s Fiber Optic Infrastructure – SPC InfraCo
Highline do Brasil, with Digital Colony’s backing, and AIMCo could pursue a joint over-bid to BTG’s binding offer for Oi’s SPC InfraCo. Indeed, Digital Colony has not yet acquired a scaled fiber platform in Brazil with Highline (towers) and Scala (Data Centers) being in adjacent digital infrastructure sectors.
Importantly, Highline do Brasil has previously transacted with Oi when it acquired its UPI Torres unit.
(2) Grupo TorreSur
Grupo TorreSur, Brazil’s third largest independent tower company, which has 6.0k tower sites in Brazil is seeking-out buyers. Indeed, this could present an opportunity for Highline do Brasil to triple the size of its towers business in Brazil.
Alberta Investment Management Corporation (AIMCo) – Overview
Alberta Investment Management Corporation (AIMCo) is a Canadian pension fund with more than $118bn Canadian dollars under management. Overall, AIMCo invests in private equity, real estate, forestry assets, and infrastructure, on a global basis.
To-date, AIMCo has only made one investment in Brazil, in which it has an ownership interest greater than 20%. Specifically, this investment is in Iguá Saneamento SA which operates water supply and sewage treatment systems. Therefore, Highline do Brasil is the first significant digital infrastructure investment for Alberta Investment Management Corporation (AIMCo) in Brazil.