NYSE:BIP - Post Discussion
Post by
retiredcf on Apr 11, 2023 9:41am
TD
Have a US$49.00 target. GLTA
Brookfield Infrastructure Partners L.P.
(BIP-N, BIP.UN-T) US$33.97
Deal to Acquire Data4, a European Data Center Platform Event
BIP and its institutional partners have agreed to acquire an 80% stake in Data4, a European data center platform, from AXA Investment Management.
Impact: SLIGHTLY POSITIVE
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Data4 currently operates ~30 data centers in France, Italy, Spain, Poland, and Luxembourg, and is also developing a large project on the site of a former army barracks in Germany. As such, this acquisition will meaningfully expand BIP's existing data storage operations, which comprise 50 data centers and 230MWs of critical load capacity, and accounted for ~1% of 2022 FFO. No financial terms were disclosed, but the media (Reuters) has previously reported that a deal was expected to value Data4 at an enterprise value of ~€3.5bln (~$3.8bln) on a 100% basis, which would imply an equity investment of ~$400mm-$550mm at BIP's share (assuming that the EV is 50/50 debt and equity and BIP takes a 25%-35% share of the equity), an amount that could be easily funded with the LP's $3.4bln of corporate liquidity as of Q4/22. We assume that the deal has been executed at a discount to the major transactions that BIP was outbid on in late-2021, which were transacted at ~25x-30x EBITDA, and we anticipate further details when the LP reports its Q1/23 results on May 3.
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BIP owns active data centers in North America, Australia/New Zealand, and South America, has a partnership with Digital Realty to develop data centers in India, and also owns a data center construction project in the Netherlands with a planned capacity of 100MW.
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AXA acquired Data4 in 2018 and sold a 20% stake to Danish pension fund PFA in 2020. The terms of both transactions were undisclosed. We understand that Data4's cash flows are underpinned by long-term, inflation-linked contracts with blue-chip hyperscale customers.
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