Blackstone, Brookfield, Digital Realty Among Bidders For $11B Acquisition Of Global Switch
Data center provider Global Switch may be on the verge of a multibillion-dollar buyout as the torrent of merger and acquisition activity across digital infrastructure continues.
Buyout specialists Blackstone and KKR, both involved in major data center deals over the past year, are among the bidders, along with Brookfield Asset Management and data center providers Equinix, Digital Bridge and Digital Realty Trust, according to reports in Bloomberg and The Tech Capital.
If completed, the sale would be the fourth major acquisition of a data center provider this year, and the third in less than two months, a deal volume that has already surpassed $36B. In a written statement, Global Switch acknowledged the rumors but said that no deal has been reached.
“Global Switch’s shareholders have informed the Company that they continue to evaluate their options to potentially introduce international strategic investors to the Company and create liquidity for their stakes at the same time,” the statement read. “This evaluation is progressing but no formal transaction process has yet commenced.”
Global Switch has explored a potential sale for the better part of a year, according to Bloomberg. The company’s interest in finding a buyer first emerged in January, after plans for an IPO on the Hong Kong stock exchange fell through in late 2019.
London-based Global Switch operates 13 data centers across Europe, Australia and Asia. Since 2019, the company has been controlled by steelmaker Jiangsu Shagang Group Co. and Avic Trust Co, Chinese firms whose involvement has raised concerns about data security among some governments. Most notably, the Australian government and the Australian Securities commission announced in January that they would withdraw from Global Switch-owned data centers, citing national security concerns.
The potential sale of Global Switch is just the latest in a flood of acquisitions sweeping the data center landscape. In mid-November, Data Center REITs CyrusOne and CoreSite sold in separate deals with a combined value of over $25B — KKR taking CyrusOne private for $15B and American Tower purchasing CoreSite for more than $10B. Blackstone Inc. took data center REIT QTS Realty Trust private over the summer in another deal topping $10B.
As Bisnow previously reported, experts point to a number of market factors and potential headwinds that have incentivized companies in the data center space to seek buyers.
“There’s so much institutional capital trying to find a home,” said Jim Grice, a partner and co-leader of the Global Data Center and Digital Infrastructure Team at Bryan Cave Leighton Paisner. “We’re seeing a massive uptick in interest level, and there’s a huge supply of cash but not as much product as the dollars want.”