Carlyle Group (NASDAQ: CG) announced that its managed funds have inked a deal to acquire data center company Involta from M/C Partners. The financial terms of the deal have been kept under wraps.
Following the news, shares of the U.S.-based multinational private equity, alternative asset management, and financial services firm gained 4.9% to close at $54.56 on December 22.
Benefits of the Deal
Involta is primarily focused on hybrid IT and cloud infrastructure, including data center colocation, hybrid cloud, edge, fiber, and related products. Through 12 data center facilities, it provides mission-critical IT solutions to businesses across the U.S.
The deal aligns with Carlyle’s strategy to invest in best-in-class infrastructure companies to tap potential growth in the digital infrastructure space.
Furthermore, the combination of Involta’s footprint and infrastructure with Carlyle’s capital, global resources and deep expertise will help accelerate the growth momentum in the digital infrastructure space.
The acquisition is expected to close in the first quarter of 2022, subject to certain regulatory approvals.
Management Weighs In
Head of Digital Infrastructure at Carlyle’s Infrastructure Group, Joshua Pang, commented, “We see significant opportunity for growth given the long-term secular demand drivers of data proliferation, digital connectivity, and the digitization of enterprise and institutional operating models.”
He further added, “We look forward to a strong, long-term partnership and to leveraging Carlyle’s scale, resources, and access to capital to drive sustainable growth at Involta.”
On December 17, Deutsche Bank analyst Brian Bedell increased the price target on Carlyle Group to $72 (32% upside potential) from $70 and reiterated a Buy rating.
The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 5 Buys and 3 Holds. The average Carlyle Group price target of $68 implies 24.6% downside potential to current levels.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 100% Bullish on Carlyle Group stock, compared to a sector average of 69%.