GIP clinches first digital infra asset amidst deal spree

The $15bn take-private of US data centre REIT CyrusOne, with KKR, comes as GIP also buys a stake in an Australian LNG train.

Global Infrastructure Partners has partnered with KKR on a deal to acquire data centre REIT CyrusOne for an enterprise value of $15 billion.

As part of the take-private deal, the firms will buy the company’s outstanding common shares for $90.50 per share, amounting to a cash consideration of $11.49 billion and reflecting a roughly 25 percent premium to CyrusOne’s closing stock price at the end of September, ahead of published market speculation regarding a potential sale of the company.

In a statement, GIP partner Will Brilliant and KKR managing director Waldemar Szlezak said: “CyrusOne has built one of the strongest data centre companies in the world… We see numerous opportunities ahead to continue expanding CyrusOne’s footprint across key global digital gateway markets and look forward to leveraging our global resources, access to long-term capital and deep expertise to support the company’s growth.”

The transaction is expected to complete in the second quarter of 2022 and, upon completion, CyrusOne will be wholly owned by both firms. GIP’s investment will be made from its global infrastructure funds, while KKR’s input will primarily be from its global infrastructure and real estate equity strategies.

LNG: buying and selling

GIP has also acquired a 49 percent non-operating participating stake in Woodside Petroleum’s Pluto Train 2. The project is part of an upcoming development in Scarborough, Western Australia, which includes a new liquefied natural gas train and the construction of domestic gas facilities at the existing Pluto LNG onshore facility. The estimated capital expenditure for the development of Pluto Train 2 is $5.6 billion. GIP will fund its 49 percent share of capex plus an additional $835 million.

In a statement, GIP managing partner Adebayo Ogunlesi said: “We are particularly attracted to the modern and efficient technologies Woodside has adopted, making LNG from Pluto Train 2 one of the lowest-carbon intensity sources of LNG delivered into Asia.”

Subject to approval from Australia’s Foreign Investment Review Board, the deal is expected to complete in January 2022.

In related news, the firm announced a $2.5 billion deal to sell its 25.7 percent stake in Freeport LNG Development – which owns and operates an LNG export facility near Freeport, Texas – to JERA Americas. The firm’s second flagship fund, Global Infrastructure Partners II, acquired the stake in 2015.

The transaction sees JERA Americas’ parent company JERA, which owns a 25 percent stake in Freeport LNG Train 1, cement its status as the world’s largest buyer of LNG.