KKR and Singtel to buy out STT GDC stake for $5bn

The private equity firm KKR, along with Singapore Telecommunications, has agreed to purchase the remaining 82% of ST Telemedia Global Data Centres, a leading data center operator, for 6.6 billion Singapore dollars (approximately $5.1 billion), KKR announced in a statement on Wednesday.

This transaction values STT GDC at S$13.8 billion and occurs amid a significant surge in data centre demand, driven by advances in artificial intelligence (AI).

Once the deal is finalised, KKR will own 75% of STT GDC, while Singtel will retain a 25% interest, after factoring in the conversion of current preference shares owned by both companies.

According to KKR, this acquisition represents its largest investment in infrastructure within the Asia Pacific region to date, as global data centre investments expand due to increasing demands for cloud computing and AI functionalities.

Last year was a banner year for data centre transactions worldwide, fueled by the need to support energy-demanding AI operations. 

According to S&P Global, the data centre sector attracted over $61 billion, surpassing the previous year's $60.8 billion.

"Digital infrastructure continues to be a profoundly attractive and enduring investment opportunity worldwide," stated David Luboff, co-head of KKR Asia Pacific and head of Asia Pacific infrastructure, highlighting STT GDC's extensive presence and future development plans.

Established in 2014 with its main office in Singapore, STT GDC manages data centres across 12 regions including Asia Pacific, the UK, and Europe, offering a total of 2.3 gigawatts of design capacity. 

The firm specialises in colocation, connectivity, and support services catering to hyperscale and enterprise clients.