MIRA closes $1.9bn acquisition of hyperscale data centre firm AirTrunk

The investment will be used to expand the firm's data centre businesses across APAC at a time when competition in the hyperscale sub-sector is fierce.

A consortium led by Macquarie Asia Infrastructure Fund 2, managed by Macquarie Infrastructure and Real Assets, has closed the acquisition of an 88 percent stake in Australia-headquartered hyperscale data centre firm AirTrunk.

The deal valued AirTrunk at more than A$3 billion ($1.9 billion; €1.7 billion), and aims to expand its footprint in the Asia-Pacific region.

It is reportedly the second-largest private equity deal made in Australia since last year, when KKR took over snack food firm Arnott’s for $A3.2 billion.

The MAIF2-led consortium, which also includes other MIRA-managed entities, has acquired AirTrunk’s stake from Goldman Sachs, TPG Sixth Street Partners and AirTrunk founder and chief executive Robin Khuda. MIRA stated that Khuda would continue to hold a material stake in AirTrunk and carry on in his role as chief executive under a long-term arrangement, supported by the current executive management team.

MIRA and AirTrunk did not respond to queries on the change in the shareholding ratios.

Goldman Sachs, the former largest shareholder of AirTrunk, reportedly started looking for a new investor around September to help fund AirTrunk’s rapid growth. MIRA finalised the acquisition agreement in January.

Founded in 2014, AirTrunk manages and develops hyperscale data centre platforms for large cloud, content and enterprise clients across Asia Pacific. Its five data centres – two in Sydney, Melbourne, Singapore and Hong Kong – will be able to deliver a combined capacity of more than 450MW once fully operational.

“Our investors are attracted to hyperscale data centre providers such as AirTrunk because they have attributes such as long-term revenue streams and demand resilience throughout market cycles,” Frank Kwok, head of MIRA Asia-Pacific, said in a statement.

Valuations in the hyperscale sub-sector, where long-term contracts with the largest technology companies are attracting significant amounts of low-cost capital, have soared in recent months, we wrote in our analysis of the data centre sector.

“While retail co-location is static, or maybe even in slight decline, hyperscale is expanding by at least 8-12 percent globally,” Marc Ganzi, chief executive at Digital Colony, told us.

MAIF2 closed in 2018 with $3.3 billion in investor commitments from across the world, including $300 million from Alberta Investment Management Corporation, $75 million from New Mexico State Investment Council and $50 million from Cathay Life Insurance.