BlackRock (NYSE: BLK) and privately-held Global Infrastructure Partners (GIP), an independent infrastructure fund manager, jointly announced that BlackRock will acquire GIP for total consideration of roughly $12.5 billion comprising $3 billion in cash and approximately 12 million shares of BlackRock common stock. The transaction is expected to close in the third quarter of 2024, subject to customary regulatory approvals and other closing conditions.
The companies see infrastructure as one of the fastest growing private equity segments. They point out that a number of long-term secular trends support an acceleration in infrastructure investment, particularly increasing global demand for upgraded digital infrastructure like fiber broadband, cell towers and data centers.
GIP manages over $100 billion in client assets across infrastructure equity and debt, with a focus on energy, transport, water and waste, and digital sectors. GIP’s most notable digital infrastructure investments include a 49 percent stake in CyrusOne, a data center operator with over 50 facilities across the U.S., Europe, and Asia, and a 30 percent stake in Vantage Towers, the European tower company that operates over 82,000 sites across 10 countries, Inside Towers reported.
BlackRock has over $50 billion of infrastructure client assets under management. The firm’s most recent digital infrastructure investment was the formation of a joint venture with AT&T (NYSE: T) in May 2023, Inside Towers reported. Dubbed Gigapower, LLC, the J-V is to deploy a multi-gig fiber-to-the-premise network to an initial 1.5 million customer locations outside of AT&T’s traditional 21-state wireline service footprint.
Blackrock and GIP believe that large government deficits mean that capital formation through public-private partnerships will be critical for funding important infrastructure projects. With scarce capital in an elevated interest rate environment, operating companies are exploring partnership opportunities to leverage their embedded infrastructure assets for improving their returns on invested capital or raising capital to reinvest in their core businesses.
The companies point out that the $150 billion combination of GIP with BlackRock’s highly complementary infrastructure offerings creates a comprehensive global infrastructure franchise with differentiated origination and asset management capabilities.
Subject to completion of customary onboarding procedures, BlackRock has also agreed to appoint Bayo Ogunlesi, GIP Founding Partner, Chairman and CEO, to its Board at the next regularly scheduled board meeting following the closing of the transaction.
By John Celentano, Inside Towers Business Editor