A Blackstone-led BX consortium is raising a roughly $5.5 billion ($3.7 billion) loan package to finance its $24 billion acquisition of AirTrunk, according to two people with direct knowledge of the matter, as the U.S. company expands its Asia commitment.
Blackstone said on Wednesday (link) that it has partnered with the Canadian Pension Plan Investment Board (CPP Investments) to buy AirTrunk, considered the largest hyperscale data center company in the Asia-Pacific region.
Investors have flocked to the sector (link) 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 Dealogic.
It includes a AUD 2 billion term loan and a AUD 3.5 billion revolving credit facility, according to the insiders, who could not be named due to private information.
Blackstone declined to comment.
More than 10 banks are involved in the loan syndicate, including Credit Agricole, Deutsche Bank, Morgan Stanley and Japan’s MUFG, according to insiders.
Credit Agricole, Deutsche Bank and MUFG declined to comment. Morgan Stanley did not respond to a Reuters request for comment.
The financing would cover up to 50 percent of Blackstone’s equity investment in the deal, one of the people said, while the total value of the deal includes AirTrunk’s debt and its capital expenditures on committed projects.
HIGH PRICE
The consortium’s purchase price would be more than 20 times AirTrunk’s forecast earnings before interest, taxes, depreciation and amortization (EBITDA), the insiders said.
The loan would appear highly leveraged in a typical acquisition, but lenders are taking into account AirTrunk’s estimated growth and cash flow over the next few years based on the contracts, the people familiar with the matter said.
AirTrunk raised about A$4.6 billion from more than 30 lenders last year, and that debt will roll over after the acquisition, people familiar with the matter said.
AirTrunk’s valuation increased during the sales process, which officially began in March, due to the increasing use of AI, which requires larger data center capacities.
CPP Investments said in a statement on Wednesday that it will hold a 12 percent stake in AirTrunk following completion of the transaction.
AirTrunk founder and CEO Robin Khuda will continue to lead the Sydney-based company and retain an undisclosed stake once the transaction is completed.
Khuda, 45, who came to Australia from Bangladesh at 18 to study accounting at the University of Technology in Sydney, has built the $24 billion data centre business in less than a decade. “Our path has never been easy, we have faced so much adversity and have always come out stronger and more resilient,” Khuda said in a post on LinkedIn. He has admitted he used his savings to save the company and considered bankruptcy. “It was Christmas 2016 and I had to deliver our first data centre by September 2017… we got to the point where we were running out of money. I even took money out of my superannuation fund, that was naughty of me,” he said at the Australian Financial Review Business Summit in March. “I even called my lawyer and said I needed bankruptcy advice.” His LinkedIn profile details his three-year stint at data centre operator NextDC 
NXT is listed as deputy CEO and executive director, but his role as CEO at mobile payments company Mint Wireless, which he left after six months, is not mentioned.
