Brookfield Infrastructure Partners (NYSE: BIP) and DigitalBridge Group (NYSE: DBRG) are competing to acquire Compass Datacenters, for more than $5.5 billion, including debt, Reuters reported. BIP and DBRG are leading opposing bidding consortia in an auction for privately held Compass with an outcome expected in July, sources indicated.
Dallas, TX-based Compass Datacenters provides custom data centers for core and edge applications that serve hyperscale, cloud and enterprise customers in dedicated or hybrid colocation configurations. The company operates 17 data center campuses across the U.S., and internationally in Canada, Italy and Israel with a total available capacity of nearly 714 MW. Three sites are already fully leased and another three are customer owned, according to the company.
Compass Datacenters is owned by RedBird Capital Partners, Ontario Teachers’ Pension Plan, and the Azrieli Group. The terms of Compass’ debt allow for it to be taken over by a new owner without refinancing that debt, according to Reuters’ sources. This feature will help facilitate the deal completion at a time when high interest rates and stock market volatility have made debt for leveraged buyouts scarcer and more expensive.
Analysts have indicated that dealmaking in the data center sector has spiked in recent years. That rapid growth, fueled by cloud computing, has attracted large infrastructure investors, and spawned consolidations among fragmented segments of the industry.
BIP, headquartered in Toronto, has infrastructure investments in transportation, data centers, utilities, and midstream (natural gas transmission and storage). Its current portfolio includes 50 data centers with approximately 230 MW of critical load capacity.
In April, BIP reported that it led an investment in Data4 Group, a hyperscale data center platform in Europe with operations in France, Italy, Spain, Poland and Germany. The company says Data4’s business has approximately 100 MW of in-place capacity that is currently generating revenue, with a plan to add another 400 MW. The transaction is expected to close in 3Q23, with a total BIP-led equity investment of $2.4 billion, including BIP’s share of approximately $600 million.
Bloomberg reported in March that Boca Raton, FL-based DBRG was considering selling a minority stake in its balance sheet investment in Vantage Stabilized Data Centers, potentially raising more than $1.5 billion for DRBG to invest in other infrastructure assets.
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