Brookfield and DigitalBridge in over $5.5 billion bidding war for Compass Datacenters – sources

By Milana Vinn and Anirban Sen

(Reuters) – Brookfield Infrastructure Partners LP and DigitalBridge Group Inc are battling in the race to acquire Compass Datacenters LLC for more than $5.5 billion including debt, according to people familiar with the matter.

Brookfield and DigitalBridge are leading opposing bidding consortia in bidding for privately held DigitalBridge, the sources said, adding that a result is expected by next month.

Compass’s debt terms allow it to be taken over by a new owner without being refinanced, one of the sources said. This makes the deal easier to close at a time when high interest rates and market volatility have made debt for leveraged buyouts rarer and more expensive.

The sources requested anonymity as the matter is confidential. The Deal reported in February that Compass Datacenters was considering a sale.

Compass Datacenters, Brookfield Infrastructure Partners and DigitalBridge declined to comment.

Transactions in the data center industry have increased in recent years as the industry’s rapid growth, fueled by cloud computing, has attracted large infrastructure investors, and the fragmented nature of the industry has driven consolidation.

Compass Datacenters, based in Dallas, Texas, provides custom data centers for enterprises. It is owned by RedBird Capital Partners, the Ontario Teachers’ Pension Plan and the Azrieli Group.

Brookfield Infrastructure manages $161 billion in assets across all sectors, including transportation, data centers, utilities and midstream. Its current portfolio includes 50 data centers, according to its website.

In April, Brookfield took a majority stake in Data4 in a deal valuing the data center operator at nearly 3.5 billion euros ($3.8 billion) including debt, reported Reuters.

In the same month, Brookfield Infrastructure also acquired freight container lessor Triton International Ltd for approximately $4.7 billion.

Boca Raton, Fla.-based DigitalBridge is a digital infrastructure investment firm with nearly $69 billion in assets under management.

(Reporting by Milana Vinn and Anirban Sen in New York; Editing by Daniel Wallis)

Leave a Comment