Infrastructure investors DigitalBridge and Brookfield are in competition to acquire Compass Data Centers. The two funds are expected to prepare bids in excess of $5.5 billion including debt, according to sources that spoke with Reuters.
Compass is based in Dallas Texas and according to their website the team has designed, built and delivered more than $5 billion in data centres worldwide. It was first reported that they were looking to sell the company by The Deal in February.
The company currently names RedBird Capital Partners, Ontario Teachers’ Pension Plan, and the Azrieli Group as private investors.
Its data centre footprint is predominantly based in the US and Canada, but as reported by Capacity , expanded into Europe last year. Compass partnered with global real estate firm Hines to acquire land in the Milan metro area and built a new data centre campuses in Italy.
The macro-economic environment has led to the previously booming data centre M&A scene to hit its lowest point in a decade in Q1 23, with high inflation, rising interest rates, economic uncertainty, market volatility and bank failures all contributing factors.
The Compass deal however should be easier to complete, as its debt structure allows it to change ownership without being refinanced, the sources speaking to Reuters said.
Despite the global slowdown, the $161 billion AUM Brookfield closed a majority stake in Data4 in April. The deal valued the French data centre firm at €3.5 billion (US$3.8 billion).
While Brookfield made headlines for acquiring a data centre, DigitalBridge look set to be offloading a minority stake in Vantage Data Centre’s for $1.5 billion, as was reported by Bloomberg in March.
The winning bidder is expected to be announced this month.
