TenPeaks Launches Data Center Group via Spark Carve-out
TenPeaks has launched a new national data center group in New Zealand after acquiring the assets in a carve-out from telecom operator Spark. Spark will remain a key anchor tenant for the new platform, a structure that provides stable, predictable cash flows and is a favored playbook for financial sponsors in the digital infrastructure space.
- The transaction values the data center business at up to $705 million, representing a high multiple of 30.8x the pro-forma EBITDA for fiscal year 2025. Spark received initial cash proceeds of $453 million, which will be used to reduce the company's net debt. - The acquirer, Pacific Equity Partners (PEP), is an Australian private equity firm making the investment through its Secure Assets Fund, which focuses on infrastructure growth platforms. Spark is retaining a 25% stake in the new entity, TenPeaks Data Centres, and will hold two seats on its board. - The deal includes a contingent "earn-out" structure, where Spark can receive up to an additional $98 million in deferred cash if certain performance targets are met by the end of December 2027. - The carve-out consists of 11 operational data centers with a current IT capacity of 23MW. The new entity, TenPeaks, has a development pipeline to expand capacity to over 130MW, with a projected investment of more than $3 billion to meet growing demand. - Michael Stribling, formerly the general manager of Spark's data center business, has been appointed CEO of TenPeaks. He is joined by Rob Woodgate, former CFO of Fulton Hogan and Ryman Healthcare, who will serve as the new company's CFO. - This divestment is part of Spark's broader strategy, initiated in October 2024, to review non-core assets to strengthen its balance sheet and focus on its core connectivity business amid financial pressures. - The New Zealand data center market is projected to grow significantly, with one forecast estimating investments will reach $2.64 billion by 2031, driven by AI adoption, cloud services, and data sovereignty regulations. TenPeaks' expansion plans aim to capture this growth, which is spurred by hyperscale investments from companies like Amazon Web Services and Microsoft.
