Marylebone Warwick Balfour Group Plc - General - MWB Konnect
Date: 04 Oct 2000
Marylebone Warwick Balfour Group Plc ("MWB") today announces that it is launching in joint venture with strategic investors antfactory, a new space management company providing state-of-the-art independent data centres.
To be known as MWB Konnect ("Konnect") the business will focus on providing, very large independent data centres, or server hotels, initially throughout Europe. As well as MWB and antfactory (whose shareholders include Citibank and Allianz) shareholders of the new business will include the founder directors, David Alberto, Mark Gurney and Philip Moffat.
MWB and its senior management (including, all the Executive Directors) are investing on a 50:50 pari passu basis, a total of £1.25m cash in return for 32.85% of Konnect's equity capital and an annual coupon of 25%. antfactory is also investing £1.25m cash for a 32.85% stake in the business. A further 32.85% equity stake will be owned by the Konnect management with remaining 1.45% of the shares held by Altium Capital, the venture capital company. In addition MWB and antfactory are providing £5m each of mezzanine finance over a 24 month period commencing after equity funds have been utilised and will receive a 15% return on the loans.
Konnect intends to acquire the sites - either freehold or long leasehold - and develop 500,000 sq ft centres that will include 25,000 sq ft of serviced offices that may be operated by MWB Business Exchange. Sites have already been identified and locked out in Lisbon, Dublin, Frankfurt and Madrid while negotiations are underway on a further seven European locations including London. Konnect is in discussions with a number of banks and financial institutions on the financing of the acquisition and development of the data centres.
It is anticipated that the first development phase will be completed by the autumn of 2001. Each centre will be a high quality purpose-built and designed facility with the emphasis on the latest security measures. Power sources and fibre requirements for each centre in the initial development phase have already been secured.
David Alberto, MWB Konnect joint Chief Executive, said: "MWB Konnect, with the backing of both MWB and antfactory, is able to combine property development and space management expertise with the technical understanding to satisfy our clients' requirements."
Harpal Randhawa, antfactory Chairman and Chief Executive said: "antfactory and MWB have both been working for months in developing opportunities around the intersection of real estate, technology and services. We are very excited about the complementary skills the two of us will bring as strategic shareholders and to working with the management in building the business."
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