Goldman Sachs, TPG back Asia data center player

Approximately 60% of the investment comprises equity and the rest debt, Robin Khuda, founder and CEO of AirTrunk, told The Australian Financial Review. TPG participated through TSSP, its dedicated credit and special situations platform. A senior debt facility was committed by ING Bank and Natixis. The capital will support data centers in Sydney and Melbourne due to go online in the third quarter of 2017.

Khuda established the company in 2014, having previously spent three years with NextDC, an Australian data center provider with capacity of more than 103 megawatts nationwide and a market capitalization of A$925 million. He also helped establish Australia’s first data center real estate investment trust (REIT), the Asia Pacific Data Centre Trust, which owns several NextDC-operated properties.

The data centers in Sydney and Melbourne will have initial capacity of 20 MW, rising to 120 MW once fully completed. AirTrunk also has a three-year plan to invest more than A$2 billion in creating a data center platform that covers the entire Asia Pacific region.

“I am delighted to have completed this capital raising that will lay a solid platform in fulfilling our ambition in becoming the Asia-Pacific region’s leading data center platform supporting large-scale enterprise and technology companies,” Khuda said in a statement. “We had a strong level of interest in our fundraising process globally, but Goldman Sachs and TSSP stood out for their level of support, industry knowledge and commitment to the AirTrunk business over the long-term.”

According to NextDC’s most recent annual report, Gartner predicts that by 2019 more than 30 of the 100 largest vendors’ new software investments will shift from cloud-first to cloud-only. This is reflected in an estimate made by Microsoft last year that the share of revenue generated by its cloud products – Office365, CRM and Azure – would increase three-fold to 30% by 2018.

Australia has seen considerable investment and capacity building in data centers – Frost & Sullivan projects the market will see compound annual growth of 13% between 2015 and 2021, reaching A$2 billion in value – as global players increase their local presence. However, the industry is seeing growth across the Asia Pacific region, with telecom providers and technology companies often taking the lead.

There is also private equity involvement. Last year, Warburg Pincus established a joint venture with 21Vianet that will develop and acquire data centers in China, while GDS Holdings – a Chinese operator backed by SBCVC and global data center player Singapore Technologies Telemedia – raised $192.5 million in a US IPO.

In Australia specifically, Quadrant Private Equity secured a 3.4x return on Canberra Data Centers (CDC) as Infratil and Commonwealth Superannuation Corp. bought a majority stake in the business for A$784 million. CDC’s customer base primarily comprises federal government agencies.

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• Topics
• Australasia
• Southeast Asia
• Technology
• Infrastructure
• Expansion
• Australia
• Singapore
• TPG Capital
• Goldman Sachs
• Growth capital