Legion Partners Asset Management has said DigitalBridge should sell if it doesn’t hit the investor’s expected valuation targets.
Bloomberg reports activist investment firm has built a position in DigitalBridge Group Inc. and believes the digital infrastructure company should consider a sale if current efforts fail to deliver value to shareholders.
The DigitalBridge portfolio includes the recently acquired Switch Inc. and AIMS DC, DataBank, Scala Data Centers, Landmark Dividend LLC, Vantage Data Centers, and AtlasEdge. There are also a number of tower companies including EdgePoint, Highline, Vantage Towers, and Vertical Bridge. The company also has investments in fiber and small-cell companies.
During a presentation at the Bloomberg Activism Forum this week, Legion Chief Investment Officer Chris Kiper said he supports DigitalBridge’s leadership under CEO Marc Ganzi and its moves to transform the company over the past two years.
He estimates the company could triple in value in the next two years as it continues to raise new funds. But if those efforts fail to see the company’s shares re-rate within the next 12 to 18 months, the company should consider a sale.
DigitalBridge believes its approach is best for investing in digital infrastructure and delivering superior, long-term value, a spokesperson told Bloomberg, adding that the company is pleased to have the support of Legion and other shareholders and remains committed to maintaining an open and constructive dialog.
Legion, which has been an investor since 2020, during which time the company has rebranded from Colony Capital and pivoted entirely to digital infrastructure. Kiper noted that under Ganzi DigitalBridge has consistently exceeded its fee-earning assets under management targets.
Legion estimates that, based on a 2023 sum-of-its-parts analysis, there is potentially an 80 percent upside on where the shares are trading and the company could triple in value by 2025 as new funds are launched.
If those targets can’t be achieved by current efforts, Kiper said the company should consider a sale. It's unclear if this envisioned sale would be for the entire company or selling the numerous portfolio companies individually.