In a big-ticket investment in the digital infrastructure space in Southeast Asia, a consortium of private equity major KKR and Singtel will invest S$1.75 billion ($1.3 billion) in Singapore-headquartered ST Telemedia Global Data Centres (STT GDC), according to a company announcement on Tuesday.
The consortium will invest $1.3 billion in redeemable preference shares (RPS) with detachable warrants. Once the warrants are exercised in full, the consortium will invest an additional $920 million.
Following the transaction, ST Telemedia remains the majority shareholder of STT GDC.
STT GDC is among the fastest-growing players, with over 95 data centres across 11 geographies and points of presence in over 20 major business markets. Its data centre portfolio has a combined capacity of over 1.7GW of IT load.
The investment in the data centre operator is being made through KKR’s Asia Pacific Infrastructure Investors II Fund.
The investment firm’s past investments in SE Asian digital infrastructure space include Nxera, a Singapore-based data centre platform catering to the Asia Pacific region; Pinnacle Towers, a digital infrastructure platform focused on the Philippines; and OMS Group, a provider of neutral subsea telecommunications cable services.
STT and STT GDC selected the consortium through an independent competitive process that considered, among other things, the consortium’s collective expertise and track record, financial strength, and proposed business strategy.
In addition to advancing STT GDC’s position in the markets in which it operates, the investment proceeds will also be used to support the company’s ongoing international expansion and growth plans through organic and inorganic means.
“Data centres serve as an important backbone of the digital infrastructure that enables an increasingly digital economy and many critical industries globally. Our investment in STT GDC is a rare opportunity to support the growth of a leading data centre platform with a terrific track record of growth and significant potential, whilst deepening our existing collaboration with Singtel,” said David Luboff, Co-Head of KKR Asia Pacific and Head of Asia Pacific Infrastructure, KKR, in the company statement.