A new entrant has emerged in the race to acquire data centre giant Global Switch Holdings, with Australia’s NextDC reportedly readying a bid for the Asia Pacific portfolio of the Chinese-controlled firm.
ASX-listed NextDC, which owns and operates 14 data centres in key Australian cities, has hired investment bank Macquarie Capital to help find a financial partner in a prospective deal, according to a Monday story by The Australian.
Bloomberg reported last month that Global Switch — which is majority-owned by Chinese steelmaker Jiangsu Shagang Group with further backing from AVIC Trust, an investment arm of Shanghai-listed AVIC Capital — was set to begin a sale process that could value the London-based company at $10 billion.
Private equity majors Blackstone and KKR, as well as global operators Digital Realty and Equinix, have expressed interest in bidding for the firm, the news agency said.
Big Bite of Portfolio
Global Switch’s portfolio comprises nine data centres in Europe and five in Asia Pacific, including two each in Singapore and Sydney and one in Hong Kong. The APAC assets account for 144 megawatts of the portfolio’s total IT capacity of 322MW, according to information compiled by James Murphy, managing director for Asia Pacific at research firm DC Byte.
In a Tuesday LinkedIn post, Murphy called the potential takeover of Global Switch’s APAC assets a “very interesting development” that would add significant capacity to NextDC’s 247MW portfolio and provide the Brisbane-based firm with assets in Hong Kong and Singapore.
Founded in 2010 by Aussie tech entrepreneur Bevan Slattery, NextDC looks set to tap the resources and financial savvy of Macquarie, whose asset management arm already holds a majority stake in another regional data centre player, Sydney-based AirTrunk.
After powering up its first Asian data centres in Hong Kong and Singapore in December 2020, AirTrunk opened its TOK1 in Inzai, a commuter suburb of Tokyo near Narita International Airport, last November with an initial capacity of 60MW. Last month, the firm announced plans to build a second hyperscale facility in Japan of 110MW.
NextDC’s possible bid for a large chunk of Global Switch’s portfolio comes as consolidation gathers steam in the fragmented data centre market.
Infrastructure investment firm DigitalBridge announced in May that it would pay $8.4 billion for US data centre operator Switch, which had also attracted bidding interest from Canadian asset management giant Brookfield.
Bloomberg reported in April that Chinese data centre company Chindata had received preliminary takeover interest from industry rivals. Shanghai-based GDS Holdings was considering a bid to combine with Bain Capital-backed Chindata, according to sources cited by the agency, while EdgeConneX, backed by Swedish private equity firm EQT, was also seen as a likely contender.
Earlier that same month, China’s VNET Group said it received an unsolicited offer from two mainland companies to acquire all of the outstanding ordinary shares of the Blackstone-backed data centre developer.
Investment manager Hina Group and the Shanghai branch of Industrial Bank proposed to pay an amount representing a 48 percent premium to VNET’s last closing stock price at the time of the announcement and a discount to the value implied by Blackstone’s investment in $250 million worth of convertible notes earlier this year.