Apollo Funds To Obtain Majority Stake In Data Center Developer
Apollo Global Management has made a major acquisition in its mission to capitalize on astronomical data center demand.
Funds managed by Apollo agreed to acquire a majority interest in Stream Data Centers from Stream Realty Partners, Apollo announced Wednesday. The company said its backing — with its funds and affiliates prepared to deploy billions of dollars into next-generation digital infrastructure — positions SDC to execute on a multigigawatt pipeline.
“Stream Data Centers represents a landmark digital infrastructure transaction for Apollo,” Apollo executives said in a press release. “We believe SDC is uniquely positioned to serve the infrastructure needs of the world’s most sophisticated technology customers.”
SDC builds, leases, manages and operates data centers and has delivered more than 20 campuses to date. The company controls more than 4 GW of long-term powered land.
Financial terms weren't disclosed, but the deal is expected to be finalized this year. SDC’s management team will retain a minority stake and continue to head the business.
Both companies will commit new capital to Stream’s existing data center land fund to accelerate site development for 650 megawatts of near-term power capacity across campuses in Chicago, Atlanta and Dallas. A newly formed Apollo subsidiary will be the investment manager of the land fund.
Apollo estimates data centers will require several trillion dollars of global investment over the next decade, driven by a “secular global industrial renaissance,” with power, facilities and semiconductor chips requiring substantial investment, the company said. Apollo-managed funds have deployed about $38B into next-generation infrastructure investments since 2022.
A 2024 study from McKinsey & Co. found that to avoid a supply deficit from the explosion of data center demand, at least twice the data center capacity built since 2000 would have to be built in less than a quarter of the time.
Apollo's big data center play comes roughly one month after news that the company is hoping to court investors to buy $5B of equity in its nontraded REIT. Its plan to sell common stock in Apollo Realty Income Solutions got the green light from the Securities and Exchange Commission in June, clearing the way for the capital raise.
