CIBCHave a US$46.00 target. GLTA
EQUITY RESEARCH
June 20, 2023 Flash Research
BROOKFIELD INFRASTRUCTURE
PARTNERS L.P.
Compass Datacenters Acquisition On Strategy
BIP and the Ontario Teachers’ Pension Plan are acquiring Compass
Datacenters from RedBird Capital Partners and Azrieli Group. Brookfield will
be investing $1.35B, with BIP’s share of equity at ~$335MM on a look-
through basis. Compass Datacenters constructs and provides data centers
for global hyperscalers and cloud providers. This is a classic data center
business to which BIP continues to increase its exposure. The transaction is
expected to close by year-end, subject to customary regulatory approvals.
The current Compass management team will continue to lead the company
post transaction closing.
The Compass Datacenters acquisition is in line with BIP’s growth strategy of
adding digitalization exposure while enhancing the service offering in the
Data segment. This transaction also continues to demonstrate BIP’s
commitment to remain opportunistic in periods of market weakness during
the recent volatile market conditions.
Digitalization, Decarbonization and Deglobalization continue to underpin
most of BIP’s investments and is increasing the velocity of investment
activity. We see tailwinds from organic growth in addition to these secular
trends leading to strong future growth. Digitalization in particular is still one of
the fastest-growing needs with capital needed to upgrade data infrastructure
globally. The amount of data generated globally is expected to double over
the next two years and now data providers require new partners to help
manage balance sheets. The Compass platform in particular complements
BIP’s existing platforms in South America, Europe and Asia Pacific.