Data Center Startup From Singapore Acquires Indonet for IDR 2.36 Trillion

Singapore-based data center startup Digital Edge bought Indonesian company PT Indointernet Tbk (Indonet) for US$ 165 million (IDR 2.36 trillion), reported by Tech In Asia, Tuesday (15/6).

Digital Edge Holdings announced that the acquisition of the issuer with the EDGE stock code was carried out through its subsidiary in Hong Kong, namely Digital Edge.

Indonet founder and President Commissioner Otto Toto Sugiri is known to have sold more than 90 million or 57% of his shares, with a transaction value of IDR 946.88 billion or around US$ 66.5 million. That way, Otto only controls 16.56% or 66.86 million shares of EDGE at this time.

Launching information disclosure on the Indonesia Stock Exchange (IDX) page on Tuesday (14/6), Indonet’s management explained that the share purchase transaction was carried out on June 11, 2021.

Controls almost 60% of EDGE Shares

Now, Digital Edge owns 59.1% or 238.7 million shares of EDGE. Several retail investors recorded selling Indonet shares at a price of IDR 10,495 per share on June 11, 2021.

Besides Otto, there is Han Arming Hanafia who sold 40.58 million units of shares and currently the remaining 30.09 million or equivalent to 7.45%. Then, Bing Moniaga also sold 35.11 million units of shares, leaving 26.04 million or 6.44%.

“Digital Edge is the new controller of Indointernet,” said Indonet Corporate Secretary Donauly E Situmorang in the disclosure yesterday. Structure Research predicts that the data center market in Jakarta will reach US$ 635 million in 2025.

This is supported by the rapid development of the digital economy, the acceleration of companies in adopting the cloud (servers and data centers), and the emergence of more startups.

In the official statement previously explained, Toto remains a shareholder of EDGE and plays an active role as President Commissioner of Indonet.

According to him, Digital Edge has global knowledge of the data center industry, good relationships with regional and global customers, and strong access to funding supported by global private equity from Stonepeak Infrastructure Partners.

“Together with Digital Edge, Indonesia is in the best position to empower the growth of the data market and drive the growth of the digital economy. We are planning the next data center expansion project,” said Toto some time ago.

Indonet President Director Djarot Soebiantoro said that Digital Edge’s entry as a strategic investor is in line with the focus of services being developed by EDGE Data Center.

Collaboration to Expand Customer Database

Indonet and Digital Edge can also collaborate in expanding the customer database. “Digital Edge’s network with global customers will certainly be very valuable for Indonet’s business growth,” said Djarot.

Edge Data Center has an important role in the current era of technology and industry 4.0, as a data processing solution that can help customers to overcome latency issues, operational and security challenges.

A report from Gartner in early 2021 estimated that 75 percent of enterprise data is expected to be created and processed in Edge Data Centers by 2025.

This is in line with Analysys Mason’s 2019 report which showed that companies will allocate an average of 30 percent of their IT budgets to edge computing over the next three years.

Samuel Lee, Chief Executive Officer of Digital Edge acknowledged Indonesia as one of the data markets with good growth for the development of Edge Data Center.

Rapid development, accelerated cloud adoption and the success of startup companies with six unicorns in Indonesia will drive demand for colocation services and the growth of Edge Data Centers.

The company has transformed into a digital business enabler by providing digital infrastructure services such as multi-connectivity, data center, and cloud.

Currently, Indonet is focusing on developing HyperScale ConneX (HSX) and EDGE Data Center services to provide seamless multi-connectivity solutions. The goal is between various data center and cloud providers that are safe, reliable, and trusted.