AI data
The AirTrunk deal expanded Blackstone’s data center holdings, which were worth $55 billion before the transaction. Pixabay

In Australia's biggest buyout deal this year, U.S. private equity giant Blackstone will buy the Sydney-based data center group, AirTrunk, for a value of over AU$24 billion, in what would also be the company's largest investment in the AI-linked assets in the Asia Pacific region.

Blackstone, along with Canada Pension Plan Investment Board (CPP Investments), is acquiring AirTrunk from Macquarie Asset Management (MAM) and Canada's Public Sector Pension Investment Board (PSP), reported Reuters. CPP will hold 12% of the stake in AirTrunk.

Since the buyer is overseas, the deal needs approval from the Australian Foreign Investment Review Board (FIRB).

"AirTrunk is another vital step as Blackstone seeks to be the leading digital infrastructure investor in the world across the ecosystem, including data centers, power and related services," Blackstone president Jon Gray said.

Founded in 2015, AirTrunk is the largest data center group in Asia Pacific, with 11 sites across Australia, Japan, Malaysia, Hong Kong and Singapore. MAM and PSP had sold the entire 88% stake they held, the two companies stated.

Founder and chief executive Robin Khuda will retain a stake and continue as the chief executive.

"This transaction evidences the strength of the AirTrunk platform in a strong performing sector as we capture the next wave of growth from cloud services and AI and support the energy transition in Asia Pacific," Khuda said.

As per Dealogic data, the number of leveraged-buyout jumped by 41% to $286 billion during the first half of 2024. The equity-led buyouts are staging a comeback after a lull due to financing costs in 2022 and 2023.

"Digital infrastructure is experiencing unprecedented demand driven by the AI revolution as well as the broader digitization of the economy," Blackstone's Sean Klimczak, the Global Head of Blackstone Infrastructure and Nadeem Meghji, Global Co-Head of Blackstone Real Estate, said in a joint statement, reported Forbes Australia.

With the demand for digital infrastructure on the rise due to the boom in AI, big investors and asset managers are getting ready to spend billions on buying and investing in data centers in Asia Pacific. The value of AirTrunk, too, went up during the sale process, which was initiated in March.

"CPP Investments has invested in the Asia Pacific data center sector for several years, and we have witnessed significant growth in this space, fueled by a strong demand for digital infrastructure and, more recently, the increasing adoption of artificial intelligence," said Max Biagosch, CPP Investments' global head of real assets.

While the AirTrunk deal expanded Blackstone's data center holdings, which were worth $55 billion before the transaction, the company confirmed that it was considering more buyouts worth $70 billion.