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Sydney-based Pacific Equity Partners has taken a plunge into the booming data centre market through the acquisition of a majority stake in Spark New Zealand’s (ASX: SPK) portfolio for up to NZ$584 million ($532.2 million).
The investment, the first in data centres for the private equity group, gives it a 75 per cent interest in Spark’s NZ$705 million ($642.5 million) portfolio of 11 existing data centres in New Zealand and a development pipeline totalling capacity of more than 130MW.
Spark, a dual-listed New Zealand telco and digital services group, announced today that it has secured an agreement to sell the controlling interest in its data centre business to Pacific Equity Partners (PEP) which is acquiring its share of the business through the Secure Assets Fund II.
The fund is part of PEP’s Secure Asset portfolio, which invests in infrastructure growth platforms and includes investments in over-50s-communities developer Serenitas, LMS Energy and Opal HealthCare.
“PEP’s investment with Spark in its data centre business, aligns well with our Secure Assets strategy of partnering to invest in high quality infrastructure growth platforms,” say PEP managing directors Andrew Charlier and Evan Hattersley in a joint statement.
“With PEP’s backing and Spark’s partnership, (new investment vehicle) DC Co is positioned for transformative growth, delivering essential infrastructure that will support cloud and AI adoption and data sovereignty in New Zealand.”
PEP has not detailed any immediate growth plans for the new investment, but for Spark the investment is aimed at capitalising on demand for data storge in New Zealand due to the uptake of cloud and artificial intelligence technologies.
Spark says a new capital partner “secures a funding pathway to build out Spark’s planned 130MW-plus data centre capacity development pipeline”.
“We are pleased to reach this agreement with PEP, one of Australia’s leading private capital managers with a strong track record of growing businesses across New Zealand and Australia,” says Spark CEO Jolie Hodson.
“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 per cent retained stake – creating further value for our shareholders over the long term.”
Under the terms of the deal, Spark will receive an initial cash payment of about NZ$486 million ($442.9 million) plus a deferred cash payment of up to NZ$98 million ($89.3 million) should performance-based objectives be achieved by the end of the 2027 calendar year.
Spark also plans to transfer the data centre assets and operations into a new stand-alone company, currently known as "DC Co", which the company says will have its own board, management team and debt financing facilities that have no recourse to Spark.
The company plans to use the proceeds of the sale to pay down debt.
“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,” says Hodson.
“This strategic investment allows DC Co to leverage its strong market position as a high-quality data centre network provider, to capture a significant share of the expected growth in the local data centre market and position itself as a competitive option for international customers looking to grow their services in New Zealand.”
The sale remains subject to regulatory approvals, including from New Zealand’s Overseas Investment Office.
The company is targeting settlement of the transaction on 31 December 2025.
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