Blackstone Announces Agreement to Acquire AirTrunk in a A$24B Transaction

Rhea-AI Summary

Blackstone and CPP Investments have agreed to acquire AirTrunk, the leading Asia Pacific data center platform, for an implied enterprise value of over A$24 billion. This marks Blackstone's largest investment in the Asia Pacific region. AirTrunk operates in Australia, Japan, Malaysia, Hong Kong, and Singapore, with over 800MW of capacity committed to customers and potential for 1GW of future growth.

The acquisition aligns with Blackstone's strategy to be the leading global digital infrastructure investor. Prior to this deal, Blackstone's portfolio included US$55 billion in data centers and a US$70 billion prospective pipeline. The transaction is subject to approval from the Australian Foreign Investment Review Board.

Positive

• Acquisition of AirTrunk, the largest data center platform in Asia Pacific, for A$24 billion
• Expansion of Blackstone's digital infrastructure portfolio in a high-growth region
• AirTrunk has over 800MW of capacity committed to customers
• Potential for 1GW of future growth across the region
• Aligns with increasing demand for digital infrastructure driven by AI and digitization

Negative

• Transaction subject to approval from Australian Foreign Investment Review Board
• Large capital expenditure required for acquisition and future development

Insights

Financial Analyst

Blackstone's acquisition of AirTrunk for A$24 billion marks a significant move in the data center industry. This deal, Blackstone's largest in Asia-Pacific, demonstrates the firm's strategic focus on digital infrastructure amid the AI boom and increasing cloud demand. The transaction's scale underscores the sector's growth potential, with projected global capex of $2 trillion over the next five years.

AirTrunk's 800MW committed capacity and potential for 1GW future growth position it as a dominant player in the APAC market. This acquisition aligns with Blackstone's existing $55 billion data center portfolio and $70 billion pipeline, potentially yielding significant synergies and market leverage.

For investors, this move signals Blackstone's confidence in the sector's long-term prospects, driven by AI and digitization trends. The involvement of CPP Investments adds credibility to the deal's potential returns. However, regulatory approval from Australia's Foreign Investment Review Board remains a key consideration for deal completion.

Tech Expert

The AirTrunk acquisition highlights the critical role of data centers in the AI revolution and broader digital transformation. With the surge in data processing demands, especially for AI applications, AirTrunk's extensive APAC presence becomes strategically vital. The platform's capacity to support over 1GW of future growth is particularly noteworthy, given the exponential increase in data generation and processing needs.

This deal also underscores the growing importance of edge computing and low-latency services in the APAC region. AirTrunk's geographic spread across Australia, Japan, Malaysia, Hong Kong and Singapore positions it ideally to serve diverse markets with varying technological maturity levels. The integration with Blackstone's existing data center assets could lead to technological synergies, potentially accelerating innovation in areas like energy efficiency and AI-optimized infrastructure.

Market Research Analyst

Blackstone's acquisition of AirTrunk reflects the robust growth trajectory of the APAC data center market. The region is experiencing a surge in demand driven by rapid digital adoption, cloud migration and the proliferation of AI applications. AirTrunk's strong market position in key APAC economies positions it to capitalize on this trend.

The deal's timing is strategic, coinciding with the accelerated digital transformation post-pandemic and the AI boom. It also aligns with the increasing trend of hyperscale data centers to support cloud services and AI workloads. The involvement of CPP Investments suggests strong institutional investor confidence in the sector's long-term prospects.

However, investors should note potential challenges such as increasing competition, regulatory complexities across different APAC markets and the need for substantial ongoing capital investments to maintain technological edge and expand capacity. The success of this investment will largely depend on AirTrunk's ability to navigate these challenges and capitalize on the region's growing digital infrastructure needs.

SYDNEY--(BUSINESS WIRE)-- Funds managed by Blackstone Real Estate Partners, Blackstone Infrastructure Partners, Blackstone Tactical Opportunities, and Blackstone’s private equity strategy for individual investors, along with the Canada Pension Plan Investment Board (“CPP Investments”), have entered into a definitive agreement to acquire AirTrunk, the leading Asia Pacific data center platform, from Macquarie Asset Management and the Public Sector Pension Investment Board, for an implied enterprise value of over A$24 billion¹. This represents Blackstone’s largest investment in the Asia Pacific region. The transaction is subject to approval from the Australian Foreign Investment Review Board.

AirTrunk is the largest data center platform in the Asia Pacific region, with 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.

Jon Gray, President and Chief Operating Officer of Blackstone, said: “This is Blackstone at its best – leveraging our global platform to capitalize on our highest conviction theme. AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centers, power and related services.”

Sean Klimczak, Global Head of Blackstone Infrastructure and Nadeem Meghji, Global Co-Head of Blackstone Real Estate, said: “Digital infrastructure is experiencing unprecedented demand driven by the AI revolution as well as the broader digitization of the economy. Prior to AirTrunk, Blackstone’s portfolio consisted of US$55 billion of data centers including facilities under construction, along with over US$70 billion in prospective pipeline development. We look forward to partnering with the outstanding AirTrunk management team to further accelerate its growth.”

Robin Khuda, Founder and Chief Executive Officer of AirTrunk, said: “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. 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.”

It is expected that there will be approximately US$1 trillion of capital expenditures in the United States over the next five years to build and facilitate new data centers, with another US$1 trillion of capital expenditures outside the United States. Blackstone is capitalizing on this movement as a leading investor globally in data centers. Blackstone has invested in both the debt and equity of other data center companies, including as owner of QTS, the fastest growing data center 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 United States.

About Blackstone
Blackstone is the world’s largest alternative asset manager. We seek to deliver compelling returns for institutional and individual investors by strengthening the companies in which we invest. Our more than US$1 trillion in assets under management include global investment strategies focused on real estate, private equity, infrastructure, life sciences, growth equity, credit, real assets, secondaries and hedge funds. Further information is available at www.blackstone.com. Follow @blackstone on LinkedIn, X (Twitter), and Instagram.

¹ Including capital expenditure for committed projects

View source version on businesswire.com: https://www.businesswire.com/news/home/20240904256821/en/

Blackstone Media Contacts

Mariko Sanchanta

Blackstone

mariko.sanchanta@blackstone.com | +852 3656 7738



Hayley Morris

MorrisBrown Communications Pty Ltd

hayley@morris-brown.com.au | +61 407 789 018

Source: Blackstone

FAQ

What is the value of Blackstone's acquisition of AirTrunk?

Blackstone and CPP Investments are acquiring AirTrunk for an implied enterprise value of over A$24 billion.

How much data center capacity does AirTrunk currently have?

AirTrunk has over 800MW of capacity currently committed to customers.

What is the potential for future growth in AirTrunk's data center capacity?

AirTrunk owns land that can support over 1GW of future growth across the Asia Pacific region.

In which countries does AirTrunk operate data centers?

AirTrunk operates data centers in Australia, Japan, Malaysia, Hong Kong, and Singapore.

What is driving the demand for digital infrastructure according to Blackstone?

Blackstone cites unprecedented demand driven by the AI revolution and the broader digitization of the economy.