Valuation Disputes in Digital Infrastructure: Risks and Opportunities in DigitalBridge's Digita Oy Sale

In a sector where infrastructure assets are both coveted and contentious, DigitalBridge's potential sale of its Finnish subsidiary Digita Oy offers a microcosm of the broader challenges investors face in valuing digital infrastructure. With the company targeting a $1.2 billion valuation for the telecom tower and data center operator—yet facing pushback over its growth assumptions—the deal underscores a critical question: How do diverging views on asset potential shape investment opportunities in a world of macroeconomic uncertainty?

Valuation Disputes in Context: Why Digita Oy Matters

DigitalBridge's bid to sell Digita Oy—a 2018 acquisition—has reignited debates over the true worth of digital infrastructure in Europe. The $1.2 billion price tag reflects optimism about Finland's robust 5G rollout and the subsidiary's data center spin-off, Digita Data Centers Oy. Yet skeptics argue that macroeconomic headwinds, including slower enterprise IT spending and regulatory scrutiny over tower pricing, could cap near-term returns.

This tension mirrors industry-wide struggles to reconcile short-term risks with long-term trends. Telecom towers, for instance, are often valued based on their tenant diversity and lease renewal rates. Digita's portfolio, which serves major Nordic operators like Telia and Elisa, boasts 89,000 active sites across Finland and Iceland. However, some buyers may question whether these assets can sustain growth amid saturated markets or delays in 5G spectrum auctions.

Meanwhile, the data center spin-off—a 10kW-per-rack facility in Pasila, Helsinki—highlights the sector's dual challenges. While colocation demand remains strong for hyperscalers and enterprises, the facility's valuation hinges on its ability to attract tenants in a region where cloud infrastructure is already overbuilt in some sectors.

Case Study: Digita's Strategic Position

DigitalBridge's Nordic strategy, anchored by Digita and its Icelandic venture ÍslandsTurnar, exemplifies the rewards—and risks—of regional infrastructure plays. Finland's stable regulatory environment, coupled with its role as a crossroads for Baltic and Scandinavian markets, positions Digita's towers as critical nodes for 5G expansion. Similarly, ÍslandsTurnar's creation in 2021—combining two major Icelandic portfolios—shows how digital infrastructure can be restructured to capture underpenetrated markets.

Yet these assets also face sector-specific hurdles. For instance, Nordic tower operators are grappling with pressure to lower lease rates as operators consolidate. Meanwhile, data center valuations are increasingly tied to energy efficiency and climate resilience—areas where Digita's Pasila facility scores high, but competitors in cooler climates (e.g., Sweden) may have natural advantages.

Risks vs. Opportunities: A Balancing Act

For investors, the Digita sale represents both a cautionary tale and a buying opportunity. The valuation dispute highlights two key risks:
1. Macroeconomic Volatility: A prolonged slowdown in enterprise spending could delay the realization of projected lease-up rates for data centers and tower sites.
2. Regulatory Uncertainty: Moves to cap tower pricing or mandate infrastructure sharing could erode margins.

However, the upside is equally compelling. Digital infrastructure remains a "recession-resistant" sector, with 5G and edge computing driving steady demand. Digita's strategic assets in Finland and Iceland also benefit from:
- Tenant Diversity: Its tower portfolio serves multiple carriers, reducing reliance on any single operator.
- Geopolitical Stability: Nordic markets are less exposed to trade wars or political upheavals than regions like Southeast Asia.

Investment Considerations: Where to Look Now

Investors weighing exposure to DigitalBridge—or similar infrastructure players—should focus on three factors:
1. Regulatory Environment: Prioritize markets with stable frameworks for spectrum allocation and infrastructure pricing.
2. Tenant Mix: Assets with diverse customer bases (e.g., telecoms, cloud providers, governments) are less vulnerable to sector-specific downturns.
3. Valuation Leverage: The Digita sale suggests that buyers may demand discounts for assets perceived as "overvalued." This creates entry points for investors willing to wait for price corrections.

Conclusion: A Wait-and-See Strategy with Long-Term Upside

While DigitalBridge's $1.2 billion target for Digita Oy may yet be revised downward, the deal underscores the sector's core dynamic: valuation disputes today can become value-capturing opportunities tomorrow. For patient investors, the Nordic region's underpenetrated 5G markets and Digita's operational strengths argue for a "hold-and-monitor" approach.

In the short term, DigitalBridge's stock—currently trading at a discount to peers—could remain volatile as the sale unfolds. However, with $37.3 billion in Fee-Earning Equity Under Management and a pipeline of $13 billion in loan origination opportunities, the company is well-positioned to navigate the storm. Those willing to sift through the valuation noise may find themselves in prime positions to benefit as digital infrastructure continues its ascent.

Investment Advice:
- Hold: For existing shareholders, maintain a position while monitoring the Digita sale's outcome.
- Wait: For new investors, consider entering at a 10–15% discount to current prices if the valuation dispute drags into 2026.
- Diversify: Pair exposure to DigitalBridge with broader plays in Nordic infrastructure, such as Telia Company (TLS) or regional data center REITs.

In the end, the true value of Digita Oy—and assets like it—will be decided not just by spreadsheets, but by the pace of digital transformation in a world hungry for connectivity.