Colony Capital unveils succession plan amid M&A deal

The real estate firm has acquired digital infrastructure manager Digital Bridge – and tapped its founder to be Colony's next CEO.

Real estate firm Colony Capital has announced a leadership succession plan in conjunction with its $325 million acquisition of Digital Bridge, with which it closed on a $4 billion telecommunications and data infrastructure fund earlier this year.

Marc Ganzi, founder of Digital Bridge, a Boca Raton, Florida-based company, will become chief executive of Los Angeles-based Colony Capital in 2021, while Tom Barrack, the firm’s founder, will remain executive chairman. Barrack had resumed the CEO role in November 2018 following the resignation of former CEO Richard Saltzman, having held the position from Colony’s founding in 1991 through 2014, when Colony Capital became a public company through its merger with Colony Financial.

Colony Capital and Digital Bridge declined to comment for this story.

Colony Capital is paying for two-thirds of the acquisition with cash. The rest will be paid for by units of LP interests in the firm’s operating partnership, according to a statement. The deal brings Digital Bridge’s $20 billion portfolio of 349,000 telecom sites and 39 data centers into Colony Capital’s now $60 billion of managed assets.

The deal comes nearly two months after their joint venture Digital Colony Partners closed on $4.05 billion, including a $300 million GP commitment.

The two companies came together last year to raise money for investments in digital infrastructure. The sector is seen as having high-growth potential as industries move to cloud-based data management and access to mobile networks continues to increase.

“As our experiential world gives way to a new future – a data-driven world – real estate in its current format with long-dated contractual revenue streams from traditional tenants will have to change and adapt or face substantial obsolescence,” Barrack said in the statement.

Digital Colony Partners has deployed nearly $1 billion in capital in four investments to date, including a $200 million investment in Latin American telecoms operator Andean Telecom Partners and a $275 million acquisition of Finnish broadcast tower operator Digita. The fund has also backed Freshwave Group, a UK telecom platform, and Toronto-based Peer 1, a colocation services company.

This article was first published by sister publication Infrastructure Investor.