@LynzforCongress

@LynzforCongress

Compound248

@compound248

Digital Bridge is finalizing a huge transformation from a stale legacy real estate biz to the best owner of digital infrastructure assets this side of $BYTE Index.

$DBRG = combo of Private Equity + Directly Held Digital Infra: data centers, fiber, towers, & more.

#CotD
🧵👇
1/

Led by Marc Ganzi and Ben Jenkins, $DBRG is poised to grow assets for years.

They built DBRG as an independent biz, then merged it into Colony Capital - taking over the combinedco. They sold all of CLNY's legacy real estate, positioning DBRG as THE pureplay dig infra holdco.

2/

At its core, $DBRG is a Private Equity biz, raising large PE funds that target dig infra. Key holdings incl Zayo & Vantage Data Centers. It also uses co-invest funds and bal sheet capital for large takeouts. It is expanding into other alternative investments (eg, credit & HF).
3/

Read 9 tweets

Compound248

@compound248

#CotD #3 - American Tower

Operating 214k cell towers (43k US + Canada), $AMT is the world's largest tower owner. Its revenue has grown w/ mobile data usage. As this trend persists, & w/ 5G on the horizon, AMT may grow for years to come, like other $BYTE Index members.

1/x🧵👇👇

$AMT exhibits:

• Global scale
• Stable growth
• Durable, strong cash flow
• Levered capital returns

These attractive features, coupled with secular growth trends around mobile data consumption, have helped drive a 22% CAGR over the past ten years!! (7.3x your $)

2/

Secular growth trends remain.

Recent organic rev growth has been mid-single digits and AFFO (cash flow) closer to 10%.

Rev. is primarily from LONG-term leases w/ huge mobile cos (eg, AT&T). These have inflation escalators and only a modest portion face renewal risk each yr.

3/

Read 11 tweets

Compound248

@compound248

1/x

Megacable - #CotD 2:5

With 4.1 mm unique subs (incl 3.75 mm broadband), Megacable is Mexico's #2 cableco. It's an example of a non-US $BYTE Index holding in last-mile connectivity.

High-Single Digits % Sub Growth + A Few % Price = Secular Growth near 10% p.a.

🧵👇

EBITDA margins for non-US cablecos are often higher than in the US, as the cost pressure of video is less acute.

OTOH, ongoing capital intensity also tends to be higher, esp. for EM-based cos actively doing new-builds.

Mega:
50% EBITDA Margins and 30%+ CapEx as % Revenue.
2/

Given "EM risk" & higher capital intensity, Mega trades at a large discount to US comps:
<4.5x 2021E EV/EBITDA.

US cablecos are 8-12x and often carry 4-5x in debt! Compare to Mega's Net Debt/EBITDA @ 0.6x.

When Mega slows its growth CapEx phase, might its FCF margin expand?
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Read 8 tweets

Compound248

@compound248

#CotD - $EQIX
I'm writing about 5 digital infra cos in 5 days.

1: Equinix is a global Data Center leader. It epitomizes the compelling nature of digital infra, like those in the $BYTE Index.
• Huge Growing TAM
• Global
• High-Quality Assets
• Growth & Profitablty

🧵👇👇
1/x

Huge Growing TAM:

Using data requires either internet access (off-premises) or local storage (your device, local server).

Off-premises data comes from Data Centers (video, SaaS, cloud, social). EQIX is a huge Data Center owner, selling into the inexorable digitization trend.
2/

Global:
$EQIX is one of the largest Data Center cos, w/ 230 DCs globally.

It's a "1 stop shop" for enterprises that want to deploy cloud anywhere. Other DCs may focus on "hyperscale" cloud providers (FAANG). EQIX has HCPs but also a broader enterprise focus, w/ >10k clients.

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