Investment manager HMC Capital said it is in talks over purchasing a range of data center assets including Global Switch’s Australia business.
In a statement released on Friday, HMC Capital said it was conducting due diligence ahead of several potential acquisitions.
“Discussions between HMC and the relevant vendors are ongoing and the terms of any potential acquisitions remain confidential, conditional and non-binding,” the statement said.
HMC Capital put out its statement following a report in Australia Financial Review that said the fund, which is run by David Di Pilla, an investment banker and former head of UBS Australia, was set to pay AU$2 billion ($1.33bn) for Global Switch Australia.
In July, Global Switch reportedly rejected several bids for its Australia business because they did not meet its valuation. At the time, AFR reported that Stonepeak, Queensland Investment Corporation, and the Canada Pension Plan Investment Board were among those vying for control of the business, but it seems HMC Capital is now at the front of the queue.
Global Switch operates 13 facilities across Europe, Australia, and Asia. The company has another building in development in London, UK, and completed construction on a facility in Frankfurt, Germany.
It operates two adjacent conjoined data center buildings in the Ultimo area of Sydney on an 11,090 sqm (119,370 sq ft) site. The 392-422 Harris Street property is known as Sydney West, while 273 Pyrmont Street is known as Sydney East.
The seven-story West currently offers 20.5MW, with the newer East site boasting 22MW. The company recently filed to expand the site with additional floors on the existing buildings.
A sale of Global Switch has been mooted for several years, since Chinese steel giant Jiangsu Shagang Group took control of the company over a three-year period beginning in 2016. It was talking to potential acquirers back in January 2021 with an eye to a possible $10-11 billion sale of the whole business.
More than a dozen firms were named as potential buyers, and last year investment funds EQT, KKR, and PAG were reportedly shortlisted for a final round of bidding, but talks were said to have ‘ground to a halt’ in January 2023 over a gap in company valuations. EQT was reportedly still interested in a deal valuing Global Switch’s entire operation at closer to $6-7 billion.
Several Australian governmental departments have left Global Switch’s Sydney site since the Chinese investors took control of the company, including the Department of Home Affairs, the Australian Securities and Investments Commission, the Australian Digital Health Agency, and the Australian Communications Media Authority.
