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US private equity group Blackstone is about to take over Sydney-based data center company AirTrunk, investing billions of dollars in the expansion of cloud computing and artificial intelligence.
Blackstone is in the ultimate stages of negotiations with the Canada Pension Plan Investment Board to amass AirTrunk from Macquarie's asset management arm, two people aware of the matter said. The acquisition is predicted to cost 20 billion Australian dollars ($13.5 billion), one other person with knowledge of the deal said.
The deal, if accomplished, can be the biggest transaction in Australia this 12 months. Blackstone competed for AirTrunk with a rival consortium that also included private equity firm Silver Lake and asset manager DigitalBridge.
The Australian company has quickly built a pan-regional empire with 11 data centers. Founded in 2016, the corporate is one among the region's fastest-growing technology corporations and was already considering a possible IPO before the sale process began. The sale price will include debt, two people aware of the situation said.
Blackstone has been expanding aggressively into the info center space in recent times. The company owns a $55 billion portfolio of information centers and more under construction and plans to speculate billions more in “developing future pipelines,” Blackstone CEO Stephen Schwarzman said during an earnings call in June.
AirTrunk was founded by Robin Khuda, who emigrated to Australia from Bangladesh on the age of 18 and stays the corporate's CEO today. Khuda initially relied on foreign investors, including Goldman Sachs, to fund the fledgling company while he built larger data centers that might meet the demand for increasing cloud and AI infrastructure in Asia.
Macquarie, together with Canadian pension fund PSP Investments, acquired an 88 percent stake in the corporate in 2020, speculating that growth in AI would require significant investment in digital infrastructure. This deal valued AirTrunk at A$3 billion.
AirTrunk has significantly accelerated its expansion in Japan this 12 months, opening an information center outside Tokyo in May. Analysts said Japan shall be a high-growth marketplace for data center corporations as more industrial groups digitize their manufacturing processes.
In an April 2024 report, Goldman Sachs analysts predict that total data center power demand will increase 160 percent by the tip of the last decade, from 400 terawatt hours of electricity in 2023.
Consolidation in the info centre market has gathered pace over the past 12 months as the mix of high growth and long-term money flows has attracted infrastructure investors. AustralianSuper, the country's largest superannuation fund, invested A$2.5 billion in Europe's Vantage Data Centres last 12 months, securing a minority stake.
Blackstone and Macquarie declined to comment. AirTrunk didn’t immediately reply to a request for comment.
