- We are positive on the ST Telemedia Global Data Centres (STT GDC) acquisition as it would propel Singtel into a global data centre (DC) powerhouse with strong synergies across its regional DC platform (Nxera).
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STT GDC In the bag.
- Singtel has announced the acquisition of the remaining 82% stake in STT GDC from Temasek for S$6.6bn as part of a consortium with KKR, confirming earlier media reports. Post transaction, Singtel would have a 25% stake in the JV (upon the conversion of redeemable preference shares) with KKR holding 75%.
- The deal is subject to regulatory approvals and is expected to close in 2HCY26. STT GDC and Nxera (Singtel’s own regional DC platform) will continue to operate independently with Singtel having a board seat in the former.
Transaction comps.
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- Singtel said the deal would have minimal impact on its balance sheet and has affirmed its commitment on sustainable dividend growth including Singtel's variable realisation dividends (VRD) into FY30. We estimate a slightly negative to neutral impact on earnings in the short to medium term (STT GDC posted a FY24 net loss of S$185m) with strong EBITDA scalability in the longer term.
Access to a global DC footprint, providing significant scale and synergies while cementing Asian leadership.
- Read more at SGinvestors.io.
