Global Switch will be exiting the wholly-owned Australian business as it has reportedly agreed to sell Global Switch Australia Holdings to HMC Capital for an AU$2.12 billion, which amounts to approximately US$1.41 billion. The group is anticipated to close the deal towards the end of 2024 or at the beginning of 2025 upon receipt of all required regulatory clearances.
This strategic divestiture will create capital for Global Switch to invest in other businesses. The announcement made Thursday morning dovetails with Global Switch’s active attempt to improve the capability of its operations and financials.
There have been rumors about the sale of Global Switch since it was acquired by Jiangsu Shagang Group, a Chinese steel conglomerate, back in 2016. The talks relating to the full sale of the company had already emerged as early as January this year when the acquisition was pegged to value between AU$10 billion and AU$11 billion. Over the years, several companies have come to be considered likely buyers. A list of reported possible buyers includes investment firms such as EQT, KKR, and PAG. According to undisclosed sources, such negotiations failed at the beginning of 2023 over valuation differences.
In the early days of this year, Global Switch rejected multiple offers for its Australian assets citing that those offers did not make the then-expected valuation. Successful bidders included Stonepeak, Queensland Investment Corporation, and the Canada Pension Plan Investment Board. At the end emerged HMC Capital.
GSAH operates two interdependent data center buildings located in the Ultimo precinct of Sydney on a total site area of 11,090 square meters. The data centers are 392-422 Harris Street, Sydney West, capable of about 20.5 megawatts, and 273 Pyrmont Street, Sydney East, with a potential capacity of about 22 megawatts. The company has lodged plans to expand both sites with additional floors on the existing buildings.
HMC Capital oversees more than AU$10 billion in assets for a broad institutional, high-net-worth, and retail investor base. In July, HMC added to its asset list, acquiring North American digital infrastructure investor StratCap for US$28.5 million.
According to Ashley Muldoon, chief executive officer of Global Switch, the proceeds from the sale will strengthen the balance sheet of the company and will generate crucial funds to pursue growth opportunities in key markets. He stressed that such strategic move will enable Global Switch to face the mounting demand for data center capacity about AI and HPC deployments.
