Blackstone $16 bln AI deal borrows from SPAC boom
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Antony Currie
MELBOURNE, Sept 5 (Reuters Breakingviews) -How does a buyer avoid paying a huge multiple for a fast-growing company in a hot sector? A group led by Blackstone BX.N appears to have managed to do so with its agreed A$24 billion ($16.1 billion) offer on Wednesday to purchase Australia-based AirTrunk, which operates data centres for artificial intelligence developers like Microsoft MSFT.O and Amazon AMZN.O. The achievement requires borrowing some data-massaging techniques from the SPAC boom.
The target is privately-owned, mostly by Macquarie and Canada's Public Sector Pension Investment Board, so financial details are scant. The deal values AirTrunk's enterprise at some 21 times EBITDA, the Australian Financial Review reported, citing investment bankers. That would be in line with multiples for the next 12 months sported by some publicly traded rivals like Equinix EQIX.O and Digital Realty Trust DLR.N.
Trouble is, such comparisons are imperfect. The multiple assigned to Blackstone's biggest investment in Asia Pacific appears derived from run-rate EBITDA. This includes commitments from clients to do business for the next few years, per the AFR which dimisses itas "fake EBITDA".
That might be a tad harsh. All forecast earnings rely on pledges and guesswork to some extent, not least in new and rapidly expanding sectors. And Blackstone is well-placed to understand the data centre business. It has a $55 billion-worth portfolio of them and set up a joint venture last year with Digital Realty.
The distortions, though, appear to go on. Blackstone says the A$24 billion enterprise value includes not just the generally accepted components of equity and net debt, but also "capital expenditure for committed projects". This helps the sellers put a sum on the business that is twice what was expected when the sale process kicked off last year - and eight times the valuation their own 2020 purchase bestowed on it.
Such tweaks to accepted financial metrics are reminiscent of the focus on total addressable markets and optimistic multi-year growth estimates blank-cheque companies threw together to justify their purchases.
AirTrunk's success and the willingness of its clients to invest heavily in AI and data centres, ought to be a better bet - and not require similar tricks. That said, using a vanilla metric like expected 2024 earnings would spit out a purchase multiple of 87 times EBITDA, per AFR. Regardless of how confident of success, that's a hard number for any buyer to say out loud.
Follow @AntonyMCurrie on X
CONTEXT NEWS
Blackstone and the Canada Pension Plan Investment Board on Sept. 4 agreed to buy Australia-based data centre company AirTrunk.
In a statement, Blackstone said the deal has an "implied enterprise value" of more than A$24 billion ($16.1 billion), including capital expenditure for committed projects. Blackstone is the lead investor, with the CPPIB taking a 12% stake.
The duo is purchasing the business from Macquarie and Canada's Public Sector Pension Investment Board. They had bought 88% of AirTrunk in 2020, valuing the enterprise at A$3 billion.
Founder and CEO Robin Khuda, who owned most of the rest of the equity, will retain a smaller stake after the sale.
Blackstone said the deal represents its largest investment in the Asia Pacific region.
Editing by Una Galani and Ujjaini Dutta
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.
