By Rishav Chatterjee
(Reuters) -Asset manager HMC Capital will acquire Global Switch (NYSE:SWCH) Australia in A$1.94 billion ($1.29 billion) deal, the Australian firm said on Thursday, as the company looks to tap into the booming data centre sector.
The data centre assets under the deal will anchor a real estate play and establish a platform that the firm, founded and backed by banker-turned-investor David Di Pilla, intends to list.
HMC will raise A$300 million at A$8.75 per share to fund the acquisition. The company's shares were placed on a trading halt before the announcement was made.
The offer price represents a 5% discount compared to Global Switch's closing price on Wednesday.
Four years ago, the federal government banned government agencies from using Global Switch Australia, which owns two major developments in inner Sydney, over data security concerns
HMC Capital's takeover comes as a Blackstone-led consortium recently acquired larger data centre group AirTrunk for over A$24 billion.
The global surge in demand for data centres, driven by the rise of artificial intelligence, has prompted HMC to expand into infrastructure-style investments.
"Data centres are very much a ‘hot ticket item’ with the AI hype-train showing no signs of slowing down, and as such companies like HMC are keen to gain a foothold in this area," said Tim Waterer, market analyst at KCM Trade.
The asset manager said it would establish a global digital infrastructure platform, which would include the data centre operator and a new institutional unlisted fund managed by HMC.
The asset manager acquired US-based digital infrastructure asset manager StratCap last year, and has said it is exploring a data centre REIT.
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($1 = 1.5072 Australian dollars)