By Kane Wu, Scott Murdoch, Renju José
HONG KONG/SYDNEY (Reuters) – A Blackstone-led consortium is securing a loan package worth about A$5.5 billion ($3.7 billion) to help finance its A$24 billion purchase of AirTrunk, two sources with direct knowledge of the matter said, as the U.S. firm increases its exposure in Asia.
Blackstone (NYSE:) said on Wednesday it has partnered with Canadian Pension Plan Investment Board (CPP Investments) to acquire AirTrunk, which is considered the largest hyperscale data center business in Asia Pacific.
Investors have flocked to the sector as artificial intelligence drives demand for capacity, and the financing package would be the second-largest acquisition loan in the region this year, according to data from Dealogic.
The facility includes a A$2 billion term loan and a A$3.5 billion revolving credit facility, according to the sources, who did not want to be identified because the information is private.
Blackstone declined to comment.
More than 10 banks are involved in the loan syndicate, including Credit Agricole (OTC:), Deutsche Bank, Morgan Stanley and Japan's MUFG, the sources said.
Credit Agricole, Deutsche Bank and MUFG declined to comment. Morgan Stanley did not respond to a request from Reuters.
The financing would cover up to 50% of Blackstone's equity investment in the deal, one of the sources said, while the total deal value includes AirTrunk's debt and its capital spending for committed projects.
HIGH PRICE
The consortium's purchase price would be more than 20 times AirTrunk's projected earnings before interest, taxes, depreciation and amortization (EBITDA), the sources said.
The loan would appear highly leveraged for a typical buyout, but lenders are taking into account AirTrunk's estimated growth and cash flow over the next few years, according to its contracts, the sources said.
AirTrunk borrowed about A$4.6 billion from more than 30 lenders last year and that debt will be rolled over after the acquisition, the sources said.
AirTrunk's value increased during the sales process, which officially began in March, due to the growing use of ai that requires greater data center capacity.
CPP Investments said in a statement Wednesday that it would own 12% of AirTrunk once the deal is finalized.
AirTrunk founder and CEO Robin Khuda will continue to lead the Sydney-based company and retain an unspecified stake once the deal is finalized.
Khuda, 45, who came to Australia from Bangladesh as an 18-year-old to take an accounting course at the University of technology Sydney, built the A$24 billion data centre business in less than a decade. “Our journey has never been easy, we have faced so many adversities, and we always come out stronger and more resilient,” Khuda said in a LinkedIn post. He has admitted to using retirement savings to save the business and contemplated bankruptcy. “It was Christmas 2016 and I had to deliver our first data centre in September 2017 … we got to the point where we ran out of money. I even took money out of my superannuation fund, so it was a bit of a mischief on my part,” he told an Australian Financial Review Business Summit in March. “I even called my lawyer and said I needed insolvency advice.” His LinkedIn profile lists his three-year stint at data center operator NextDC as deputy CEO and managing director, but omits his CEO role at mobile payments company Mint Wireless, which he stepped down from after six months.
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