Blackstone Close to $13.5 Billion Acquisition of Data Center Leader AirTrunk

Key Takeaways

Blackstone is the leading candidate to take control of AirTrunk, a major data center provider.

The final offers were submitted last week, with Blackstone competing against a group led by IFM Investors.

The deal hasn’t been officially confirmed yet.

Blackstone, a prominent New York-based investment management and private equity firm, is on the verge of acquiring AirTrunk, a top data center operator in Australia, in a deal worth $13.5 billion. This move could significantly impact the AI and data sectors.

After edging out other competitors, including a consortium led by IFM Investors, Blackstone has emerged as the preferred bidder for AirTrunk. The consortium that Blackstone competed against included big names like DigitalBridge, GIP, Mubadala’s MGX, and Silver Lake.

Although the deal isn’t finalized yet, discussions are ongoing, with expectations of a resolution soon, as reported by Bloomberg.

To finance this massive acquisition, Blackstone has been negotiating with banks to secure a loan of approximately AUS$5.5 billion ($3.6 billion USD) at the holding company level. This loan would complement an existing AUS$7 billion ($4.6 billion USD) funding package underwritten by four banks, with private funds ready to contribute at least AUS$1.5 billion ($986 million USD) in junior debt.

Blackstone’s Strategic Move in the AI Sector

If the deal goes through, it would be one of the biggest digital infrastructure transactions of the year. AirTrunk’s current owners, Macquarie Group Ltd and PSP Investments, are willing to sell their 88% stake in the company, which operates data centers across Australia, Singapore, Hong Kong, Japan, and Malaysia. AirTrunk was previously controlled by an investment group led by Goldman Sachs’ special situations arm.

This acquisition aligns with Blackstone’s strategy to expand its presence in the data center industry. The firm has been steadily increasing its assets in this sector, including the acquisition of the vast QTS site in Phoenix, Arizona, for $10 billion in 2021. By acquiring AirTrunk, Blackstone aims to tap into the growing demand for data center properties, particularly in the AI sector, where supply often falls short of demand. This strategic move positions Blackstone to benefit from rental yields and an increased market share in the tech infrastructure space.