Gillian Tan (Bloomberg) -- Colony Capital Inc. agreed to acquire Digital Bridge Holdings LLC, an investor in mobile and internet connectivity companies, for $325 million, paving the way for Chief Executive Officer Tom Barrack to be succeeded by Digital Bridge co-founder Marc Ganzi.
The purchase comes as Los Angeles-based Colony Capital seeks to become a key investment manager in the area of technology-linked real estate. Ganzi, who founded Digital Bridge with Ben Jenkins in 2013, will become CEO of Colony Capital in about 18 to 24 months, and Barrack will return to the role of executive chairman, the companies said Thursday in a statement, which followed an earlier report by Bloomberg.
(DCK: In recent years, Digital Bridge made a series of acquisitions in the data center provider space, snapping up DataBank, Vantage Data Centers, C7 Data Centers, and individual properties from 365 Data Centers.)
Ganzi “is an exceptional choice” to lead the company “as we accelerate, streamline and cull other Colony business lines through sale or joint ventures and continue to reduce corporate costs,” Barrack said in the statement.
Colony will expand its digital, credit and investment management platforms while realigning and redirecting its hospitality and health-care businesses, Barrack said. The company is exploring the sale of Colony Industrial, its unit that owns warehouses, with a deal potentially fetching more than $5 billion, people with knowledge of the matter said last week.
The company’s shares rose 3.8%, their biggest gain in almost six months, on Thursday.
Colony Capital and Digital Bridge were already partners in Digital Colony Management LLC, a communications infrastructure-focused firm that last month announced the closing of an inaugural investment fund that has $4.05 billion in commitments.
Digital Colony has been active in the mergers-and-acquisitions space, partnering with EQT Partners to buy fiber-network owner Zayo Group Holdings Inc. for more than $8 billion. Earlier this year, Digital Colony agreed to acquire Cogeco Peer 1 Inc., a business information and communications technology services business, from Cogeco Communications Inc. in a deal valued at C$720 million ($549 million).
Ganzi, a longtime digital-infrastructure executive, founded Global Tower Partners in 2003, and the company was acquired by American Tower Corp. a decade later for about $4.8 billion.
Colony Capital, which manages $43 billion with a focus on real estate, has been struggling to bounce back from a calamitous January 2017 merger with two NorthStar companies. Since the deal’s completion, its stock had fallen about 67% through Wednesday. Barrack, who was chairman of Trump’s inauguration committee, returned to the CEO role at Colony Capital last November.
Assets under management at Colony Capital will rise to about $60 billion with the Digital Bridge acquisition.