A million square feet of white space could change hands soon
Tata Communications - a subsidiary of India’s largest conglomerate – is reportedly selling most of its data center business, with Google, Amazon and a number of private equity funds all lining up as potential buyers.
On offer is a 74 percent stake in the division that owns and operates 44 cloud and colocation facilities, most of them located in India.
The reports on the deal caused the Tata Comms’ share price to jump nearly 4 percent. They follow similar reports published last month by Live Mint.
Exterior of Tata Comms’ data center in Bangalore
Source: Tata Communications
Tata Communications – primarily known as a network infrastructure provider - established its data center business to take advantage of the Indian boom in colocation and managed hosting, and spun it off as a wholly-owned subsidiary in 2014.
Today this subsidiary owns and operates a total of 44 data centers, including facilities in Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Pune.
The company was responsible for a quarter of India’s data center market in 2013-2014, while also establishing presence in the US, the UK and Singapore.
According to The Economic Times, the controlling interest in Tata Data Centers would cost its buyers up to $700 million. The deal would go a long way towards solving the parent company’s financial issues – Tata Comms has a net debt of nearly $1.4 billion.
The newspaper quoted sources who said that besides Google and Amazon, the list of parties interested in Purchasing Tata Data Centers includes the Blackstone Group, Carlyle, KKR, Bain Capital, Advent International and Sembcorp Industries. The Tata Group has reportedly hired Jefferies LLC to advise on the transaction.