A consortium of Blackstone, the world’s largest alternative assets manager, and Canada Pension Plan Investment Board (CPPIB) has won the auction for data centre business AirTrunk. The deal values the business at $23.5 billion.
Blackstone and CPPIB outbid a consortium led by industry superannuation funds-owned investment manager IFM Investors.
The sale is by far the largest corporate transaction in Australia this year and ranks in the top ten ever; it is also believed to be the largest data centre transaction globally to date.
The vendors are Macquarie Group (ASX: MQG) and AirTrunk founder and chief executive Robin Khuda. Khuda is to continue to lead the business under its new ownership and will retain a sizeable stake, believed to be around 5%.
Khuda sold 88% of AirTrunk to Macquarie’s infrastructure investment division and CPPIB early in 2020, retaining a 10% stake. Macquarie has now exited its entire investment which is expected to generate a strong return for its investors.
Underbidder IFM’s consortium included Global Infrastructure Partners, digital infrastructure investment company DigitalBridge (NYSE: DBRG), US private equity firm Silver Lake and Abu Dhabi government-backed technology investment firm MGX.
Khuda founded AirTrunk in 2015 anticipating strong growth in demand for data storage. In 2017 the company raised “significant capital”, estimated to be around $400 million, from Goldman Sachs, TSSP (now Sixth Street Partners) and other investors, to fund construction of “flagship” data centres in Sydney and Melbourne.
Over recent years AirTrunk has made a strong push to develop data centres in Asia. On 3 September, the company announced completion of the second phase of its new Western Tokyo data centre, its third in Japan. AirTrunk also operates data centres in Singapore, Hong Kong and Malaysia.
Companies using AirTrunk’s Asian data centres include Amazon Web Services, Bytedance − the China-based parent of TikTok, Google and Microsoft.
Increasing use of artificial intelligence (AI) has accelerated already strong growth in demand for data centres.
Prior to bidding for AirTrunk, Blackstone already had an extensive global data centres portfolio.
Image: One of AirTrunk’s Sydney data centres.