Quadrant exits data center business to Infratil, Commonwealth Super
Quadrant Private Equity will exit Australia-based Canberra Data Centers (CDC) as listed infrastructure investor Infratil and Commonwealth Superannuation Corp. (CSC) agreed to buy a majority stake in the business for A$784 million ($565 million).
Infratil, which is managed by H.R.L. Morrison & Co, said in a filing that it would pay A$392 million for a 48% stake in the data center provider, with CSC matching its commitment. The remaining 4% will be held by CDC management. The deal gives CDC an enterprise value of A$1.01 billion, including A$300 million in net acquisition debt.
Quadrant invested in CDC in September 2014, reportedly paying A$140 million for a 49.9% interest; the company's founders and management held on to the rest. This was the second investment from the private equity firm's seventh fund, which closed at A$850 million in 2014.
Founded in 2007 by Greg Boorer, who remains the CEO, CDC has 30 megawatts of capacity across three data centers. Two more facilities are currently under development - one of them due for completion in mid-2016 - which will deliver an additional 27 MW of capacity. The company's annualized EBITDA run rate is estimated to be A$50 million, with 30% growth expected for the year ending June 2017.
CDC's customer base primarily comprises federal government agencies that outsource data center requirements. An Infratil release cites a report by Frost & Sullivan that projects Australia's outsourced data center market will be worth A$1.75 billion in 2020, up from A$830 million in 2014.
Infratil has more than NZ$6 billion ($4 billion) in assets, serving as owner and operator of energy, airport, public transport and social infrastructure projects. It has acquired assets from PE before, most recently partnering with New Zealand Superannuation Fund to buy retirement village business RetireAustralia from Morgan Stanley Real Estate and J.P. Morgan Global Special Opportunities Group in 2015.
CSC is a trustee of nine superannuation schemes and had total assets of A$36.2 billion as of June 2015.
The CDC transaction is scheduled to close in July, pending Foreign Investment Review Board (FIRB) approval.
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