Investors See Data Centers as Critical Infrastructure for the New Economy

The world’s largest investors are focusing on the market for digital infrastructure, citing extraordinary demand for capital to fuel the data economy. Investor interest remains high even amid the COVID-19 crisis, according to investment bankers and securities analysts, who say the pandemic of 2020 has accelerated some activity. Leading players have raced to close deals and raise capital amid the economic chaos from lockdowns.

Investment interest in data centers has been boosted by the growth of hyperscale computing, where the tenant is a giant corporation with excellent credit, lowering the risk profile for investors. The data center business is also positioned to benefit from a range of emerging technologies including AI, the Internet of Things, 5G wireless, augmented reality and autonomous cars.

Here’s a summary of our recent coverage of equity and debt financings in the data center industry. Be sure to follow our Data Center Finance channel for the latest news for data center investors.

• Pandemic Could Drive Data Center M&A, Reshaping Industry Landscape: Economic disruptions are times of both peril and opportunity. We look at how the COVID-19 pandemic may impact the active world of data center mergers & acquisitions. Financial strength will drive the action.
• KKR Puts $1 Billion Behind New Data Center Development Platform: KKR is the latest marquee investing firm to enter the data center industry, forming Global Technical Realty (GTR) to develop more than $2.5 billion in data centers across Europe in the coming years.
• Aligned Expands Credit Line to Fund More Data Center Growth: Amid soaring demand for digital infrastructure, data center developer Aligned has increased its secured credit facility to $575 million, citing “consistently strong” customer demand.
• Equinix Goes Shopping, Selling Stock to Fund $750M BCE Deal: Colocation giant Equinix sold $1.25 billion in common stock to fund its $750 million acquisition of a portfolio of 25 data centers from Bell Canada.
• Sabey Data Centers Lines Up $800 Million in Securitized Debt: Sabey Data Centers has lined up $800 million in funding, using securitized notes to arrange low-cost capital for continued expansion of the company’s U.S. data center campuses.
• TierPoint Arranges $320 Million in Equity Funding From Investor Group : Three global infrastructure funds will invest $320 million in Tierpoint, a regional data center provider that has built a national network through a series of acquisitions.
• Investor Interest in Data Centers Still High, As Area Deal Valuations: Investor interest in the data center sector remains high, and the wave of M&A is likely to continue in 2020. But deal values are high, prompting some investors to tread carefully and adjust their strategies.

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