US fund buying Anan Data Centers stake at NIS 1b valuation

In a huge deal in the server farms sector, Boston-based investment fund Battery Global Advisors (BGA) is buying a 20% stake in Anan Data Centers, owned by Omer Adam, Maor Melul, and Nessim-Sariel Gaon. The valuation of the company, which was founded only four years ago, for the purposes of the deal is estimated at NIS 1 billion. The deal was negotiated and closed by Adam himself. Excavations for construction of the server farm have already started at the 30-dunam (7.5 acre) site at Tsor’a, near Bet Shemesh.

BGA has $4 billion under management. It offers other investment funds and family offices long-term exposure to the technological real estate and infrastructure sector. As far as is known, this is BGA’s second investment in Israel, part of a trend of expanding investment in local server farms. BGA operates from Boston, Massachusetts, and has offices in Ra’anana.

As mentioned, Anan Data Centers is valued at NIS 1 billion in the deal, and the investment will enable it to buy additional land and expedite projects, for example the 32-megawatt data center project at Tsor’a and the 64-megawatt data center project in Afula. Anan Data Centers is believed to be in the process of buying additional sites for projects totaling 300 megawatts, which positions it as one of the most active server farm companies in the cloud and AI market in Israel, and one with deep pockets, along with Yossi Shonfeld’s Shonfeld Engineering and Zahi Nahmias’s Mega Data Centers.

A year ago, Anan Data Centers obtained a NIS 420 million loan from Mizrahi Tefahot Bank for construction of the server farm at Tsor’a without a personal guarantee and before any commitment had been received from a customer. The three partners invested a further NIS 200 million equity in the project, which will cost a total of over NIS 1 billion to construct.

Three players are behind Anan Data Centers: PAI, owned by singer Omer Adam and his family; brothers and business partners Maor and Snir Melul; and Nessim-Sariel Gaon’s Swiss-based Lian Group. Maor Melul and Omer Adam, partners and close friends, have considerable experience in real estate, and own the Europe-Israel group and PAI, which, together with other partners, hold commercial assets, hotels, and income-producing properties worth over NIS 1.5 billion.

Nessim-Sariel Gaon owns Swiss company Polar Data Centers, which operates in Europe and has data center installations totaling over 150 megawatts. The company began with mining bitcoins in Scandinavia, and later expanded to server farm development. Polar has raised over $500 million for projects in Norway.