Singtel, Asia’s leading communications technology group, and leading global investment firm KKR have reached a definitive agreement under which a fund managed by KKR will commit up to S$1.1 billion (~US$800 million) for a 20% stake in Singtel’s regional data centre business. This investment puts the enterprise value of Singtel’s overall regional data centre business at S$5.5 billion. KKR will have the option to increase its stake to 25% by 2027 at the pre-agreed valuation.
The partnership, which is a first for Singtel and KKR, allows Singtel to benefit from KKR’s capital as well as its experience investing in crucial global telecommunications infrastructure and data centres.
The proceeds from this transaction will be used to speed up the regional data centre business’s expansion throughout ASEAN markets, including Singapore, Indonesia, and Thailand, while also investigating additional markets, including Malaysia. The business will have more strategic options as a result, increasing its potential for future revenue generation.
“KKR’s investment underscores the quality of our data centre portfolio and confidence in our plans to scale the business by capitalising on the digitalisation and rapid AI adoption that is transforming this region.” said, Bill Chang, CEO of Singtel’s Digital InfraCo.
Mr Bill Chang, CEO of Singtel’s Digital InfraCo, said, “KKR’s investment underscores the quality of our data centre portfolio and confidence in our plans to scale the business by capitalising on the digitalisation and rapid AI adoption that is transforming this region. Our expertise in designing, building and operating data centres, and our connectivity leadership in the region, together with KKR’s strong track record in supporting digital infrastructure assets and its platform-building expertise makes for a powerful combination. We look forward to building on the strong momentum we have achieved to grow the business into one of the region’s leading green and sustainable data centre platforms with rich hyper-connectivity services.”
Mr Arthur Lang, Group CFO at Singtel, added, “The data centre industry is growing at an accelerated pace given the unprecedented industry trends we are witnessing. KKR is a highly credible partner in the data centre space and we look forward to our strategic partnership in scaling up the platform to become a meaningful growth engine for Singtel. The investment by KKR crystallises the latent value of our data centre assets and we hope this illuminates value for our shareholders in the coming months. With more than S$6 billion being unlocked since we embarked on our strategic reset two years ago, we continue to focus on unlocking value for our shareholders.”
Mr David Luboff, Partner and Head of Asia Pacific Infrastructure, KKR, said, “We are pleased to provide this tailored solution to support the regional data centre platform of Singtel, one of the most longstanding and distinguished corporations in Singapore and a leading digital infrastructure provider in Asia Pacific. Robust digital infrastructure, including high-quality data centres, will play a crucial role in enabling Southeast Asia’s flourishing digital economy, and Singapore is well-placed to serve as a central hub for the region. We look forward to working closely with Bill, Arthur and Singtel’s talented team to meet this tremendous demand, and sharing our global expertise and network to accelerate the platform’s growth across the region.”
This investment is part of KKR’s Asia infrastructure strategy. KKR’s latest investment in Southeast Asia and data centre infrastructure worldwide. KKR has invested in Pinnacle Towers, a digital infrastructure platform in Southeast Asia focused on the Philippines; First Gen, a leading provider of clean and renewable power in the Philippines; and Aster Renewable Energy, a renewables platform that develops, builds, and operates solar, wind, and energy storage projects.
KKR has invested in CyrusOne, a global leader in sustainable, scalable, high-availability, and flexible data centre solutions; Global Technical Realty, a European build-to-suit and roll-up acquisition data centre platform; and CoolIT Systems, a Canadian leader in scalable liquid cooling solutions.
Singtel is Asia’s leading communications technology group, providing a portfolio of services from next-generation communication, 5G and technology services to infotainment to both consumers and businesses. The Group has presence in Asia, Australia and Africa and reaches over 740 million mobile customers in 21 countries. Its infrastructure and technology services for businesses span 21 countries, with more than 428 direct points of presence in 362 cities.