US private equity giant Blackstone pounces on Sydney data centre scaleup AirTrunk in monster $20 billion deal

Eight-year-old Sydney cloud data centre startup AirTrunk is set to be acquired by US private equity firm in a deal worth a reported $20 billion.

The Financial Times reports that the cloud computing and artificial intelligence business, founded by CEO Robin Khuda, who immigrated to Australia from Bangladesh when he was 18, has been part of a bidding war with with rival PE firm Silver Lake and asset manager DigitalBridge also looking at the deal.

Khuda, now 45, was previous tech entrepreneur Bevan Slattery’s chief financial officer, worked for Queensland investor Steve Baxter’s PIPE Networks and also managed NextDC 2010 IPO. He founded AirTrunk in 2015.

Blackstone and the Canada Pension Plan Investment Board are finalising Australia’s biggest startup deal since Jack Dorsey’s payments platform Square paid $39 billion for ASX-listed fintech Afterpay in 2021.

The AirTrunk acquisition dangles a rapid and major windfall for banker Macquarie Group, after it took a majority stake in the business in 2020 via the Macquarie Asia Infrastructure Fund 2, alongside Canadian pension fund PSP Investments, acquiring 88% at a $3 billion valuation. Goldman Sachs was an early backer of the data storage startup.

The FT reports deal insiders pricing acquisition at A$20bn (US$13.5bn), with the sale price including debt.

The offer on the table is even more remarkable because it appears to double the value of AirTrunk in less than 12 months, with talk last October that the company was looking to go public at a $10 billion valuation when it had EBITDA of around $600 million.

When it goes through, this will be Australia’s biggest M&A deal of 2024.

Meanwhile, AirTrunk has been expanding internationally, with a focus on Japan where it opened a second data centre, scalable to 100MW, in Tokyo in May, with a third under construction in Osaka. There are others in Hong Kong, Singapore and in July, a 150 megawatt (MW) AI-ready data centre opened in Johor Bahru, Malaysia. There are three centres in Sydney and one in Melbourne.