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In a $13.5 billion deal, Blackstone might acquire AirTrunk, a leading Australian data center operator, marking a major move in the AI and data sectors.
The NYC-based investment management and private equity house (together with partner firm Canada Pension Plan Investment Board) is said to have emerged as the preferred bidder for AirTrunk after usurping rival competitors.
Last week, bidding groups led by Blackstone and IFM Investors placed final offers for AirTrunk. The latter consortium comprises DigitalBridge, GIP, Mubadala’s MGX, and Silver Lake.
As reported by Bloomberg, the deal has not been finalized, and closure is not imminent at this stage, but talks are ongoing with a view to an outcome this week.
To finance the deal, Blackstone has been in dialogue with banks to secure an AUS$5.5b ($3.6 billion USD) loan at the holding company level. That would complement an AUS$7b ($4.6 billion USD) funding package presented to bidders underwritten by four banks, while private funds are prepared to provide at least AUS$1.5b ($986 million USD) of junior debt.
Blackstone’s Bet on the AI Sector
Given the stature of the companies involved, the acquisition would represent one of the largest digital infrastructure transactions this year. AirTrunk’s owners are Macquarie Group Ltd and PSP Investments, both willing to finalize the sale.
They control 88% of the shares in the data center business, which operates sites in Australia, Singapore, Hong Kong, Japan, and Malaysia. Previously, AirTrunk was controlled by an investor group led by Goldman Sachs Group’s special situations arm.
Blackstone is known to have aspirations to scale up its data center assets, including the vast QTS site in Phoenix, Arizona.
After the $10 billion takeover of QTS in 2021, Blackstone’s bet on the AI sector is this. The company typically identifies areas where there is a demand for properties but not enough supply. By providing the funding to secure growth at one of the top tech landlords, it will capitalize on the rent yields and market share.
