Spark NZ sells 75% stake in data centre business to Pacific Equity Partners
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The news: Telecoms company Spark New Zealand has agreed to sell a 75% stake in its data centre business to private markets investor Pacific Equity Partners (PEP) for an initial $486 million.
The numbers: Spark said the transaction values the business at up to $705 million. The telco expects to receive cash proceeds of around $486 million at completion, with deferred cash proceeds of up to $98 million contingent on the achievement of certain performance-based objectives by the end of the 2027 calendar year.
Spark's data centre business currently has over 23 megawatts of built capacity at 11 operating facilities across New Zealand.
The context: The investment will be made from PEP's secure asset fund, which invests in infrastructure growth platforms. Spark said proceeds from the sale will be used to reduce net debt.
As part of the deal, Spark will move its data centre assets and operations into a new stand-alone company that is currently being referred to as 'DC Co'. The new entity will have its own board, management team and debt financing facilities.
Spark said bringing in PEP as a capital partner ensures a funding pathway to build out the company's planned 130 megawatt data centre capacity development pipeline.
What they said: "Through this partnership we will realise value for our data centre assets in the short term, while also continuing to participate in the growing market through our 25% retained stake - creating further value for our shareholders over the long term," said Spark CEO Jolie Hodson.
PEP's managing directors Andrew Charlier and Evan Hattersley commented: "PEP's investment with Spark in its data centre business, aligns well with our secure assets strategy of partnering to invest in high quality infrastructure growth platforms."
The source: ASX
