Home Private Equity Private equity, data firms vie for $10 bln Global Switch -sources

Private equity, data firms vie for $10 bln Global Switch -sources


HONG KONG, July 29 (Reuters) – About 10 private equity firms and data companies are considering bidding for Chinese-controlled Global Switch, in a deal that could value the company at $10 billion, according to four people with direct knowledge of the transaction.

The UK-based data center operator, controlled by Chinese steelmaker Jiangsu Shagang Group, kicked off a formal sale process earlier this month with non-binding bids due in the next couple weeks, said the people.

Potential suitors include global fund KKR & Co (KKR.N), Europe-based EQT, as well as regional fund PAG, said two of the people.

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The funds are expected to compete with a number of global data companies for a controlling stake in Global Switch, the people added.

Global Switch said last month its shareholders were exploring a divestment transaction and it had appointed JPMorgan, Morgan Stanley, UBS and CITIC Securities to advise on the sale.

The sources declined to be identified as the information is confidential.

Global Switch,KKR and EQT declined to comment.

Jiangsu Shagang Group and PAG did not immediately respond to requests for comment.

The sale of Global Switch comes as data centers globally become increasingly attractive to industry players as well as private equity investors, as the ongoing COVID-19 pandemic has cultivated a much more digitalized lifestyle.

In the first half of 2022, data center transactions totalled $21.3 billion, double the $10.6 billion in the same period last year, according to a report by law firm DLA Piper.

Founded in 1998, Global Switch operates 13 data centers across Europe and Asia Pacific.

Jiangsu Shagang first invested in the company indirectly in 2016, and became its largest shareholder in 2019 after acquiring a further 24% stake for 1.8 billion pounds, according to a Global Switch announcement at the time, which would translate into a valuation of 7.5 billion pounds ($9.1 billion) for the company.

($1 = 0.8219 pounds)

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Reporting by Kane Wu
Additional reporting by Yantouultra Ngui in Singapore Editing by Sumeet Chatterjee and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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