Blackstone will buy Australian data centre group AirTrunk for an implied enterprise value of more than A$24 billion ($16.1 billion), it said on Wednesday, in what would be Blackstone’s largest investment in the Asia Pacific region.
The alternative asset manager, together with the Canada Pension Plan Investment Board (CPP Investments), is acquiring AirTrunk from Macquarie Asset Management (MAM) and the Public Sector Pension Investment Board (PSP).
The deal is the largest leveraged buyout of the year so far and comes as private equity-led transactions are starting to pick up after a surge in financing costs in 2022 and 2023 made finance buyouts more expensive and large deals difficult to close.
Global leveraged buyout volumes rose 41 percent to $286 billion during the first half of 2024, according to Dealogic.
The AirTrunk transaction requires approval from Australia’s Foreign Investment Review Board (FIRB) as the asset is being purchased by foreign parties.
Valued at $16.1 billion, the deal is the largest purchase in Australia this year and one of the largest in recent history.
Private equity investors and global asset managers are gearing up for multi-billion dollar M&A and investments linked to data centres in Asia Pacific as the rise of artificial intelligence (AI) drives demand for digital infrastructure.
AirTrunk’s value increased during the sales process, which officially began in March, due to the growing use of AI that requires greater data center capacity.
CPP Investments said in a statement Wednesday that it would own 12 percent of AirTrunk once the deal is finalized.
“CPP Investments has been investing in the Asia Pacific data centre sector for several years and we have witnessed significant growth in this space, driven by strong demand for digital infrastructure and, more recently, the increasing adoption of artificial intelligence,” said Max Biagosch, Global Head of Real Assets at CPP Investments.
Founded in Sydney in 2015, AirTrunk is considered the largest data centre group in Asia Pacific, with 11 sites in Australia, Japan, Malaysia, Hong Kong and Singapore.
The company was 88 percent owned by MAM and Canada’s PSP, which have now sold their entire stake, the two companies said in a statement.
AirTrunk founder and CEO Robin Khuda will retain a stake, the statement said, without specifying the size of his remaining stake. Khuda will remain CEO, the statement said.
“AirTrunk is another vital step in Blackstone’s quest to become the world’s leading investor in digital infrastructure across the entire ecosystem, including data centers, energy and related services,” Blackstone Chairman Jon Gray said in a statement.
Blackstone and CPP Investments outbid a consortium led by IFM Investors that also bid for AirTrunk, Reuters reported on August 28.
Reuters reported on Monday that the Blackstone-led group was close to reaching a deal to gain control of AirTrunk.
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