US data center firm Stream will be acquired by Apollo Global Management.

The investment firm this week announced that Apollo-managed funds have agreed to acquire a majority interest in Stream Data Centers (SDC) from Stream Realty Partners, a commercial real estate firm.

Terms were not shared, but SDC’s management team will retain a minority stake and continue leading the business. The deal is set to close later this year.

Stream builds, leases, manages, and operates hyperscale data center campuses and has delivered more than 20 campuses to date. The company claims a land bank totaling 4GW of potential capacity.

Apollo said it is set to potentially deploy billions of dollars into data centers to help Stream deliver on its pipeline across Tier 1 and 2 markets across the US.

“Stream Data Centers represents a landmark digital infrastructure transaction for Apollo,” Apollo partners Joseph Jackson and Trevor Mills said.

“With deep development expertise and a valuable long-term land fund in key growth markets, we believe SDC is uniquely positioned to serve the infrastructure needs of the world’s most sophisticated technology customers. Apollo will bring scaled capital and structuring capabilities to help drive recurring origination across our ecosystem. We look forward to partnering with SDC as a key operating platform to deliver next-gen capacity at scale.”

Founded in 1999, Stream’s footprint extends across Texas, Illinois, Minnesota, Colorado, Ohio, Virginia, Iowa, Oklahoma, Georgia, Alabama, and California.

As part of the transaction, Apollo Funds and Stream Realty Partners will commit new capital to Stream’s existing data center land fund to accelerate site development for 650MW of near-term power capacity across campuses around Chicago, Atlanta, and Dallas. A newly formed subsidiary of the Apollo Funds will assume the role of investment manager of the land fund.

Michael Lahoud and Paul Moser, co-managing partners of Stream Data Centers, added: “We are excited to partner with Apollo on the next phase of SDC's growth amid robust demand for data center solutions. After more than two decades of delivering exceptional data center experiences, SDC has created a building and operating model with very strong fundamentals based on collaborative, enduring customer relationships.

"This symbiotic relationship with Apollo amplifies that existing strength, offering access to the capital required to significantly scale our developments at the rate hyperscale customers demand. We look forward to working with the Apollo team to execute on our pipeline - and we extend our sincere gratitude to SRP for providing the firm foundations that have helped SDC become the organization it is today.”

Goldman Sachs & Co. acted as sole financial advisor to Stream Data Centers, while Akin Gump Strauss Hauer & Feld LLP served as legal counsel. Moelis & Company acted as financial advisor to the Apollo Funds on the transaction, while Latham & Watkins LLP served as legal counsel.

Earlier this year, Principal Asset Management closed its latest dedicated data center investment fund, which will be channelled through Stream.

Apollo, with some $840bn of assets under management, has funded a number of data center and tech projects, including backing an Intel manufacturing plant. The company recently acquired the owner of TierPoint as well as the European colocation assets of Stack.