Spark is selling a 75 percent stake in its data centre business to Pacific Equity Partners. Photo: RNZ / Kim Baker Wilson
Telecommunications company Spark is selling a 75 percent stake in its data centre business.
Private capital investor Pacific Equity Partners was expected to help Spark secure the funding necessary to meet growing demand for data storage and computing.
"Through this partnership we will realise value for our data centre assets in the short term, while also continuing to participate in the growing market through our 25 percent retained stake - creating further value for our shareholders over the long term," Spark chief executive Jolie Hodson said.
The purchase valued the data centres at $705 million, fetching a sale price of $486m, with conditional add-ons $98m.
Spark expected to receive cash proceeds of about $486 million at completion of the sale, with deferred cash proceeds of up to $98m contingent on the achievement of certain performance-based objectives by the end of the 2027 calendar year.
Proceeds will be used to reduce Spark's net debt.
Hodson said Spark will move its data centre assets and operations into a new stand-alone company, which was currently 'DC Co', which will have its own board, management team and debt financing facilities.
"DC Co has a leading data centre platform in a growing market, with over 23MW of built capacity at 11 operating data centre facilities across New Zealand, and advanced plans in place for a greenfield development on Auckland's North Shore, as well as further extensions at the Takanini site in South Auckland," she said.
PEP managing directors Andrew Charlier and Evan Hattersley said in a statement the investment aligned with PEP's growth strategy.
"With PEP's backing and Spark's partnership, DC Co is positioned for transformative growth, delivering essential infrastructure that will support cloud and AI adoption and data sovereignty in New Zealand," they said.
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