Blackstone acquires AirTrunk in A$24bn transaction

December 2024 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

December 2024 Issue

In what represents its largest investment in the Asia-Pacific region, private equity (PE) giant Blackstone is to acquire Australian data centre platform AirTrunk in a transaction valued at A$24bn.

Blackstone, along with the Canada Pension Plan Investment Board (CPP Investments), is acquiring AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board.

The transaction is the biggest leveraged buyout of 2024 so far. It comes at a time when PE-led dealmaking is starting to bounce back after a spike in financing costs in 2022 and 2023 made financing buyouts more expensive and big deals hard to close.

The largest data centre platform in the Asia-Pacific region, AirTrunk has a sizeable presence in Australia, Japan, Malaysia, Hong Kong and Singapore. It has more than 800MW of capacity committed to customers and owns land that can support over 1GW of future growth across the region.

At $16.1bn, the deal is the largest buyout in Australia this year and one of the biggest in recent history.

“This is Blackstone at its best – leveraging our global platform to capitalise on our highest conviction theme,” said Jon Gray, president and chief operating officer at Blackstone. “AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centres, power and related services.”

Blackstone has previously invested in both the debt and equity of other data centre companies, including as owner of QTS, the fastest growing data centre company in the world, CoreWeave and Digital Realty.

Blackstone is also focused on addressing the sector’s power needs in many differentiated ways, including as an investor in power and utility companies, such as Invenergy, the largest independent renewables developer in the US.

“Digital infrastructure is experiencing unprecedented demand driven by the AI revolution as well as the broader digitalisation of the economy,” said Sean Klimczak, global head of infrastructure at Blackstone. “Prior to AirTrunk, Blackstone’s portfolio consisted of $55bn of data centres including facilities under construction, along with over $70bn in prospective pipeline development.”

Moreover, it is expected that there will be approximately $1 trillion of capital expenditures in the US over the next five years to build and facilitate new data centres, with another $1 trillion of capital expenditures outside the US.

“This transaction evidences the strength of the AirTrunk platform in a strong performing sector as we capture the next wave of growth from cloud services and AI and support the energy transition in Asia Pacific,” said Robin Khuda, founder and chief executive of AirTrunk. “We look forward to working with Blackstone and CPP Investments and benefitting from their scale capital, sector expertise and valuable network across the various local markets, which will help support the continued expansion of AirTrunk.”

The acquisition of AirTrunk is subject to approval from the Australian Foreign Investment Review Board.

Nadeem Meghji, global co-head of Blackstone Real Estate, concluded: “We look forward to partnering with the outstanding AirTrunk management team to further accelerate the growth of Blackstone’s data centre portfolio.”

Fraser Tennant