SYDNEY - Blackstone, along with the Canada Pension Plan Investment Board (CPP Investments), has reached a definitive agreement to purchase AirTrunk, a key data center operator in the Asia Pacific region, for an implied enterprise value surpassing A$24 billion. This deal marks Blackstone's most significant investment in Asia Pacific to date.
AirTrunk, recognized as the largest data center platform in Asia Pacific, boasts over 800MW of capacity already committed to customers. Additionally, the company owns land that can support the development of over 1GW of future capacity across the region, including in Australia, Japan, Malaysia, Hong Kong, and Singapore.
Jon Gray, President and COO of Blackstone, highlighted the acquisition as a strategic move aligning with Blackstone's objective to become the world's leading digital infrastructure investor. The investment in AirTrunk is expected to bolster Blackstone's already substantial data center portfolio, which includes US$55 billion of data centers and more than US$70 billion in prospective pipeline development.
The transaction is pending approval from the Australian Foreign Investment Review Board and is seen as a response to the escalating demand for digital infrastructure, fueled by the AI revolution and the broader transition to a digital economy.
Robin Khuda, the Founder and CEO of AirTrunk, welcomed the acquisition, expressing confidence in Blackstone and CPP Investments' ability to support AirTrunk's continued growth through their scale capital, sector expertise, and network across local markets.
Blackstone's investment in AirTrunk is part of a broader trend, with approximately US$1 trillion expected to be spent in the United States over the next five years on building and facilitating new data centers, and an equivalent amount anticipated to be spent internationally.
The information provided in this article is based on a press release statement.
In other recent news, the National Football League (NFL) has approved private equity firms, including Ares Management (NYSE:ARES), Arctos Partners, Sixth Street, and a consortium comprising Blackstone, Carlyle, CVC, and Dynasty Equity, to acquire up to 10% stakes in its teams. This decision marks a pivotal shift in the NFL's ownership structure. In related news, Blackstone Group (NYSE:BX) is considering the sale of Clarion Events, which could value the company at approximately $2.6 billion. Preliminary discussions have already taken place with potential buyers, including private equity firms CVC and KKR.
Blackstone has also experienced significant changes in its leadership and portfolio. The company recently appointed Wesley LePatner as the new CEO of Blackstone Real Estate Income Trust, Inc., effective January 1, 2025. Furthermore, Blackstone Growth and affiliated funds have acquired a majority investment in M3, a leading hospitality-focused accounting software provider in North America. This partnership aims to accelerate M3's growth and enhance product development.
Redburn-Atlantic recently initiated coverage on Blackstone with a Neutral rating, highlighting the company's substantial exposure to real estate and private equity. The firm noted Blackstone's potential to benefit from any reduction in interest rates, particularly in the U.S. These recent developments provide insight into the investment landscape and the strategic maneuvers of major players like Blackstone.
InvestingPro Insights
As Blackstone (NYSE:BX) secures its significant investment in AirTrunk, marking a pivotal expansion into the Asia Pacific digital infrastructure, the company's financial health and market position offer valuable insights for investors. Blackstone's market capitalization stands robust at $168.72 billion, reflecting investor confidence and the scale of its operations. Despite a high Price/Earnings (P/E) ratio of 49.97, which suggests a premium on current earnings, the company's P/E is expected to adjust to 52.28 in the last twelve months as of Q2 2024, indicating a continued investor willingness to bet on future growth.
Moreover, the company's PEG ratio, which measures the P/E ratio relative to earnings growth, is at a moderate 0.78. This figure suggests that Blackstone's earnings growth is being factored into its stock price at a reasonable rate, aligning with the InvestingPro Tip that net income is expected to grow this year. Additionally, Blackstone's Price/Book ratio is high at 24.69, which could be a signal of the market's high valuation of the company's assets and future prospects.
Investors are also buoyed by Blackstone's history of dividend reliability, having maintained dividend payments for 18 consecutive years, with a current dividend yield of 2.37%. This consistency is a testament to the company's financial stability and commitment to shareholder returns, even as it ventures into new investments like AirTrunk.
For investors seeking a deeper analysis of Blackstone's performance and future outlook, InvestingPro offers additional metrics and insights. Currently, there are 10 more InvestingPro Tips available on their platform, providing a comprehensive view of Blackstone's financial landscape and investment potential. To explore these insights, visit the dedicated page for Blackstone at https://www.investing.com/pro/BX.
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