KKR, DigitalBridge mulling $11bn acquisition of Global Switch

After a record month for data centre M&A, 2021 could be about to deliver yet another record-breaking deal that will have an impact on the European and APAC regions.

By João Marques Lima

Founder and Editor, The Tech Capital

4 Mins

November 25, 2021 | 5:00 AM GMT

KKR, DigitalBridge mulling $11bn acquisition of Global Switch

Entrance of Global Switch's Paris data centre. Source: Reid Brewin Architects

The Tech Capital

London-based data centre operator Global Switch Holdings Ltd. is up for sale and attracting the attention of heavyweights which could result in the second-highest deal in the data centre space to date.

Buyout firms Blackstone Inc. (NYSE: BX) and KKR & Co. (NYSE: KKR) alongside digital infrastructure businesses DigitalBridge (NYSE: DBRG), Equinix (NASDAQ: EQIX), and Digital Realty (NYSE: DLR) are all among suitors weighing bids for Global Switch, according to sources speaking to Bloomberg.

Global Switch is controlled by Chinese steelmaker Jiangsu Shagang Group Co. (SHE: 002075) and backed by Avic Trust Co..

The company has been mulling a sale that could reach a price tag of £8 billion (US$10.7 billion) or more.

The people familiar with the matter said interest could still come to light from other infrastructure-focused investors and pension funds, potentially further cementing the investor profile shift happening in the data centre space over the last three years.

Global Switch owns and operates 13 data centres in Europe and Asia Pacific spanning about 428,000 sqm/4.6 million sq ft.

Its senior management team includes seasoned executives such as CEO John Corcoran, CFO David Doyle, COO Ashley Muldoon, CLO Eoghainn Calder, CCO Matthew Dent, and CDO Mathew Winter.

Reuben Brothers

British billionaires Reuben Brothers (RB) fully acquired Global Switch in 2007 and kickoff the company’s growth journey.

Under RB’s full control, Global Switch became the highest credit rated data centre company in the world in 2014, when Fitch upgraded the company’s credit rating to BBB+ from BBB, and Moody’s upgraded its long term issuer rating to Baa2 from Baa3.

In April 2011 the company unveiled its inaugural bond offer when strong investor appetite increased the issue size to €600 million. In December 2013, Global Switch raised its first Sterling bond for £300 million & its first Australian bond for $100 million.

RB sold 49% of its equity in December 2016 to a consortium of leading Chinese corporate and institutional investors, then a further 24.99% stake in July 2018 to another consortium comprised of follow-on investors and new stakeholders, then finally 24.01% in August 2019 to Shagang Group the largest privately owned steel maker in China.

Top 10 data centre acquisitions to date

If it comes to be, the $10.7 billion acquisition of Global Switch would make the transaction the second largest in data centre history to date following the two record-breaking transactions that saw CyrusOne and CoreSite acquired for a combined $25.1 billion on the same day in November.

Here are the ten highest price tags for data centre businesses to date and their buyers:

  • $15bn – KKR and Global Infrastructure Partners acquire CyrusOne in November 2021;
  • $10.1bn – American Tower Corporation buys CoreSite Realty on the same day;
  • $10bn – Blackstone Infrastructure Partners acquires QTS Realty Trust in 2021;
  • $8.4bn – Digital Realty snaps up European data centre specialist Interxion in 2019;
  • $7.8bn – Digital Realty purchases wholesale operator DuPont Fabros Technology in 2017;
  • $3.8bn – Equinix expands into Europe buying TelecityGroup and its 40 data centres in 2016;
  • $3.6bn – Also in 2016, Equinix acquires a portfolio of 24 Verizon data centres;
  • $3.4bn – Starboard Value Acquisition Corp. purchases Cyxtera in 2021 in one of the first major SPAC deals in the industry;
  • $2.8bn – CenturyLink sells 57 data centres to Medina Capital Management and BC Partners in 2016;
  • $1.7bn – Peak Ten buys ViaWest in 2017 later known as Flexential.

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João Marques Lima

Founder and Editor, The Tech Capital

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