China’s data centre sale sports debatable premium
As a landlord of data centres that will power the metaverse, Global Switch is a hot commodity. Private equity firms KKR and Blackstone are among those interested in buying all or a bit of the London-based group, in a deal which could value it at over 8 billion pounds, Bloomberg reported. That’s more than 32 times Global Switch’s 2020 EBITDA of 238 million pounds. CyrusOne and CoreSite Realty, which last week agreed to be sold to KKR and American Tower respectively, fetched on average less than 28 times.
Does it merit a premium? Infrastructure investors certainly like businesses that they can finance and scale up very cheaply. Still, 51% of Global Switch is held by Jiangsu Shagang, which owns Global Switch indirectly via a subsidiary. The Chinese state-backed group also part-owns a separate set of the company’s shares via a separate vehicle. If anything, buyout suitors wary of holding minority stakes in such a setup might require a discount. Nasdaq
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