Private equity giant Blackstone and Canada Pension Plan Investment Board have entered into a definitive agreement to acquire Asia Pacific data centre platform AirTrunk for over $24 billion (US$16.33 billion).
Funds managed by Blackstone Real Estate Partners, Blackstone Infrastructure Partners, Blackstone Tactical Opportunities, and Blackstone’s private equity strategy for individual investors, along with CPP Investments, are seeking to acquire the Australian company from Macquarie Asset Management and the Public Sector Pension Investment Board, for an implied enterprise value of more than $24 billion.
The transaction is subject to approval from the Australian Foreign Investment Review Board (FIRB) and should it go ahead, represents Blackstone’s largest investment in the Asia Pacific region.
Blackstone is also focused on addressing the sector’s power needs in differentiated ways, including as an investor in power and utility companies, such as Invenergy, which it touts as the largest independent renewables developer in the US.
Founder and CEO of AirTrunk, Robin Khuda, says the transaction “evidences the strength” of the Sydney-based company’s platform in a strong performing sector as it captures the next wave of growth from cloud services and AI to support the energy transition in Asia Pacific.
AirTrunk is touted as the largest data centre platform in Asia Pacific, with a sizeable presence in Australia, Hong Kong, Japan, Malaysia, and Singapore. It has more than 800MW of capacity for customers and owns land that can support over 1GW of future growth across the region.
As a technology company, AirTrunk describes itself as having a powerful purpose – to scale and sustain the relentless growth of the region’s digital future. It does this by continuously redefining and delivering data centres that meet the needs of customers – the world’s ‘most transformational companies’.
Founded in Australia in 2015, AirTrunk opened Australia’s first and reportedly largest hyper-scale data centres in 2017, then set its eyes on rapid expansion and now operates a platform of hyper-scale data centres across the region.
Blackstone COO Jon Gray says with the target’s background in mind, the deal is indicative of the PE firm leveraging its own global platform to “capitalise on our highest conviction theme”.
“AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centres, power and related services,” the COO says.
Global Head of Blackstone Infrastructure Sean Klimczak, and Global Co-Head of Blackstone Real Estate Nadeem Meghji, agree that digital infrastructure is experiencing unprecedented demand driven by the AI revolution, as well as the broader digitisation of the economy.
Prior to AirTrunk, Blackstone’s portfolio consisted of US$55 billion of data centres including facilities under construction, along with over US$70 billion in prospective pipeline development.
It is expected that there will be some US$1 trillion of capital expenditures in the US over the next five years to build and facilitate new data centres, with another US$1 trillion of capital expenditures outside the country.
Blackstone is capitalising on this movement and has invested in both the debt and equity of other data centre companies.
With US$37 billion in available capital to invest, Blackstone’s aforementioned deal comes as private equity firms are tipped to be active in the market in the coming year, both as vendor and buyer, as reported by Mining.com.au.
Private equity fundraising in Q2 2024 moderated from a bounce in the previous quarter but remains ahead by 9.5% year-to-date, with Blackstone bucking the trend to remain in the market, as reported by this news service.
While most PE managers wrapped up fundraising efforts towards the end of 2023 or early 2024, Blackstone has been the exception with its Fund IX, which recently crossed its US$20 billion target.
Blackstone led Q2 2024 fundraising with $39.4 billion, representing a 15.7% increase from Q1.
Citing data from PitchBook and Ansarada’s 2024-25 M&A outlook for Australia and New Zealand, this news service also reported PE returns seem to be stabilising in recent quarters, settling in the 9% to 11% range.
In Q2 2024, managers reported a median gross return from their PE funds and strategies they manage of 1.9% for Q2 2024 and 7.9% on a trailing 12-month basis, both of which are sequential declines.
Write to Adam Orlando at Mining.com.au
Images: AirTrunk
