KKR Acquires SingTel's Regional Data Centre Unit For $807M

Investment firm KKR & Co Inc KKR has signed a definitive agreement under which a fund managed by KKR will commit up to S$1.1 billion ($800 million) for a 20% stake in Singtel’s regional data center business. 

The investment is a part of KKR’s Asia infrastructure strategy. It puts the enterprise value of Singtel’s overall regional data center business at S$5.5 billion.

KKR will have the option to increase its stake to 25% by 2027 at the pre-agreed valuation.

The collaboration is a first between communication technology firm Singtel and KKR. It enables Singtel to tap on KKR’s expertise by investing in data centers and critical telecommunication infrastructure globally in addition to capital. 

Singtel’s regional data center business is part of the Digital InfraCo unit, which was formed in June 2023.

The proceeds from the transaction will be used to accelerate the expansion of the regional data center business across ASEAN markets, including Singapore, Indonesia and Thailand, while exploring markets like Malaysia and others. 

“KKR’s investment underscores the quality of our data center portfolio and confidence in our plans to scale the business by capitalizing on the digitalisation and rapid AI adoption that is transforming this region,” said CEO of Singtel’s Digital InfraCo Bill Chang.

Southeast Asia’s data center market is expected to grow by 17% over the next five years compared to 12% for the rest of the world, with $9 billion to $13 billion in investments projected to flow into the region.

Price Action: KKR shares are trading lower by 0.64% at $63.99 on the last check Monday.