Global Switch's Chinese owners said to kick off US$10b sale

THE owners of Global Switch Holdings are poised to kick off a long-awaited sale amid interest from other firms in the industry and investment funds, according to people familiar with the matter.

A formal sale process for the US$10 billion data centre company, controlled by Chinese steelmaker Jiangsu Shagang Group and backed by Avic Trust, could start as soon as in the coming days, the people said.

Global Switch and its financial advisers are ready to send out marketing materials to prospective buyers after months of preparations and informal talks, they said, asking not to be identified because the matter is private.

Buyout firms Blackstone and KKR, data centre investor DigitalBridge Group and operators Digital Realty Trust and Equinix have expressed preliminary interest in London-based Global Switch, Bloomberg News reported in November.

A transaction could value the business at £8 billion (S$13.7 billion) or more, people familiar with matter have said. Other infrastructure-focused investors and pension funds could also be interested in Global Switch, according to the people.

Discussions between Shagang Group and Global Switch's management about details including the asset's potential valuation have contributed to lengthening the sale process, 2 of the people said.

Deliberations are ongoing and there's no certainty any of the suitors will decide to pursue offers, or that Global Switch's owners will ultimately sell the business, they said. Representatives for Global Switch and Shagang Group declined to comment.

Data centre companies have been attracting strong takeover interest, in part due to the perception of their having stable returns, and expectations of ongoing growth as people increasingly rely on technology.

Founded in 1998, Global Switch owns and operates 13 data centres in Europe and Asia Pacific spanning about 428,000 sq m, according to its Website. It reported £251.4 million in Ebitda for 2021, a 5.8 per cent increase from the previous year, according to its annual report. BLOOMBERG