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Infratil buys into Canberra Data Centres

NZN 18/05/2016 Paul McBeth

Infratil will acquire a 48 per cent stake in Canberra Data Centres, teaming up with Australian government pension fund provider Commonwealth Superannuation Corp to buy the data centre business.

The $A392 million ($NZ421.55 million) deal comes a day after the Wellington-based investor announced its annual results and said it expected to unveil new investments in the near future.

The data centre business is headquartered in Canberra, Australia, operating three facilities with a fourth under construction, and is estimated to generate annual earnings of $A50m. The new facility is expected to generate growth of about 30 per cent in the 2017 financial year.

"The acquisition of CDC provides Infratil with a meaningful exposure to the emerging data and related telecommunications infrastructure sector, which we have been following for some time," Infratil chief executive Marko Bogoievski said.

"CDC is well positioned to take advantage of industry tailwinds including continued growth in outsourcing, data storage, and processing."

Infratil has been looking to deploy $1 billion of capital after selling its Z Energy, Lumo and iSite holdings in the 2016 financial year.

It intends to focus on renewable energy, the retirement sector, social infrastructures such as housing, telecommunications infrastructure, and waste management.

The company's shares last traded $3.375 and have gained 3.1 per cent this year.

The CDC deal will add an extra $A10m to Infratil's annual earnings, and the investment firm raised its 2017 guidance for underlying earnings to between $485m-$525m.

Commonwealth Superannuation Corp will also hold 48 per cent of CDC, with the remaining 4 per cent held by the data centre company's executive.

The deal is subject to Foreign Investment Review Board approval and is expected to be completed in July this year.

CDC was set up in 2007, providing data centre services to Australian federal and state government agencies.

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