KKR, Singtel-led consortium buys STT GDC for S$6.6 billion
KKR and Singtel will own stakes of 75 per cent and 25 per cent respectively in the company.
[SINGAPORE] A consortium led by private equity firm KKR and Singtel will acquire Singapore-based ST Telemedia Global Data Centres (STT GDC) for S$6.6 billion (US$5.1 billion) billion, in one of the largest data-centre transactions in Asia. The deal was announced by Singtel in a bourse filing on Wednesday (Feb 4).
This deal comes as demand for data centres is reaching an all-time high, with companies increasing their reliance on data centres to train and develop artificial intelligence models.
Upon completion of the deal, KKR and Singtel will own stakes of 75 per cent and 25 per cent respectively in the company, taking into account the conversion of existing redeemable preference shares that both KKR and Singtel hold in the company.
Prior to the transaction, a KKR-led consortium acquired roughly 18 per cent stake with Singtel in STT GDC in 2024. This resulted in KKR holding approximately 14 per cent stake and Singtel holding around 4 per cent of STT GDC.
Under its belt, STT GDC has more than 100 data centres in over 20 markets worldwide – including Singapore, Germany and Malaysia — with a total IT load of 2.3 gigawatts (GW).
The IT load refers to the total core energy demand that infrastructure systems needs to support.
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Regional commitment solidified
This deal marks another move by KKR and Singtel in Asia’s data centre sector.
In 2023, KKR invested up to S$1.1 billion for a 20 per cent stake in Singtel’s regional data centre business. This deal puts the enterprise value of Singtel’s overall regional data centre business at S$5.5 billion.
The same deal will allow KKR to increase its stake to 25 per cent by 2027 at the pre-agreed valuation.
KKR noted in its third quarter earnings in November last year that it still has US$126 billion in unspent capital.
KKR’s investment in the data centre industry is part of its strategy to invest in digital infrastructure. Excluding the current transaction, it has 23 investments and over US$31 billion equity invested across data centres, fibre and mobile worldwide.
Singtel’s data centre arm – Nxera – has data centres operating between Singapore, Indonesia, Malaysia and Thailand.
According to its website, Nxera’s pipeline of data centres will exceed an IT load of 200 megawatts (MW). It is unclear if the acquisition will impact the operations of Nxera.
STT GDC is expected to unlock more capital through this deal.
In 2024, Michael Tanujaya, head of investments and strategy at STT GDC noted that private equity firms have been sitting on “dry powder” – or unspent capital – for a period of time.
Shares of Singtel closed 4.7 per cent or S$0.22 higher at S$4.86 on Tuesday.
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