Singapore-based Singtel reached an agreement with investment company KKR to offload a 20 per cent stake in its regional data centre unit for SGD1.1 billion ($808.5 million), with the funds to be used to accelerate the expansion of the business across Southeast Asia.
In a statement, Singtel noted the investment puts the enterprise value of its data centre business at SGD5.5 billion, with KKR given the option to increase its stake to 25 per cent by 2027 at a pre-agreed valuation.
The transaction is expected to close in Q4, subject to standard regulatory approvals and closing conditions.
The operator explained the deal enables it to “tap KKR’s expertise investing” in data centres and critical telecoms infrastructure globally, in addition to capital.
Its data centre business is part of the Digital InfraCo unit which was formed in 2023 and has operations in Singapore, Indonesia and Thailand. It will explore moving into Malaysia and other markets in the region.
Singtel CFO Arthur Lang said the data centre industry is growing at an accelerated pace “given the unprecedented industry trends we are witnessing… and we look forward to our strategic partnership in scaling up the platform to become a meaningful growth engine for Singtel”.
Lang said the company raised more than SGD6 billion since unveiling its strategic reset in May 2021.