Blackstone, Canada Pension Plan to acquire Australian data center operator in $16 billion deal

Blackstone and the Canada Pension Plan Investment Board, Toronto, signed a definitive agreement to acquire Australian-based data center operator AirTrunk from Macquarie Asset Management and other investors including another Canadian pension fund, The Public Sector Pension Investment Board, Montreal.

CPP Investments will commit to acquire a 12% interest in AirTrunk, as part of a transaction which values the AirTrunk business at an implied enterprise value of more than A$24 billion ($16.1 billion), said a release issued by CPP on Sept. 4.

AirTrunk develops and operates data centers across the Asia-Pacific region, including Australia, Hong Kong, Japan, Malaysia and Singapore.

“CPP Investments has invested in the Asia-Pacific data center sector for several years, and we have witnessed significant growth in this space, fueled by a strong demand for digital infrastructure and, more recently, the increasing adoption of artificial intelligence,” said Max Biagosch, senior managing director-global head of real assets and head of Europe for CPP Investments, in the CPP release.

In a separate release, Blackstone noted this deal will mark its largest investment in the Asia-Pacific region.

Blackstone also said that 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, are involved in the transaction.

“Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centers, power and related services,” said Jon Gray, president and chief operating officer of Blackstone, in the Blackstone release.

Prior to the AirTrunk transaction, Blackstone’s portfolio consisted of $55 billion of data centers including facilities under construction, along with over $70 billion in prospective pipeline development, the Blackstone release noted.

Looking at the broader data center industry, Blackstone expects there will be about $1 trillion of capital expenditures in the U.S. over the next five years to build and facilitate new data centers, with another $1 trillion of capital expenditures outside the U.S.

A joint release by PSP and Macquarie indicated that these two firms hold a total of 88% of Air Trunk, adding that as part of the transaction, AirTrunk’s founder and chief executive officer, Robin Khuda, will also “realize part of his stake.”

Macquarie, on behalf of its managed funds and clients, and PSP Investments had acquired a majority stake in AirTrunk in 2020.

Khuda will remain with Air Trunk as its CEO, the PSP-Macquarie release stated.

The transaction remains subject to approval from the Australian Foreign Investment Review Board.

CPP Investments had C$646.8 billion ($472.8 billion) in assets as of June 30. Blackstone has more than $1 trillion in assets under management. Macquarie Asset Management managed approximately $A938.3 billion in assets as of March 31. PSP had C$264.9 billion of net assets under management as of March 31.

Macquarie and CPP declined to comment beyond the information provided in the news releases.

Neither Blackstone nor PSP could be immediately reached for further details.