Last Updated : Wednesday, July 1, 2020 14:07:26

CARLYLE inks pact to pick 25% stake in AIRTEL’s Data Centre Biz for $235 mln

NEW DELHI / MUMBAI / RAJKOT – In a regulatory filing as submitted to the Indian Stock Exchanges, New Delhi headquartered Sunil Mittal Bharti led Indian Telecom major Bharti Airtel Ltd said of having inked pact with one of the The Carlyle Group entities for selling 25% stake in its Data Centre business for US$235 million, the enterprise value of the data centre business is pegged at US$1.2 billion.

In a press-release titled, “Carlyle to acquire approximately 25% stake in Airtel’s Data Centre business at a valuation of US$1.2 billion”, as attached and enclosed with the regulatory filing as submitted by the company to the Indian Bourses, it further read that, the Airtel-Carlyle Group deal for investment in data centre business, underscores the significant growth potential in an emerging Digital India.

The release further read that, Bharti Airtel (NSE: BHARTIARTL) (“Airtel”), India’s largest integrated telecommunications operator, and Comfort Investments II, an affiliated entity of CAP V Mauritius Limited, an investment fund managed and advised by affiliated entities of The Carlyle Group (NASDAQ: CG) (together, “Carlyle”) today announced an agreement under which Comfort Investments II will invest US$235 million in Nxtra Data Limited (“Nxtra”), a wholly owned subsidiary of Airtel engaged in the data centre business.

The post-money enterprise valuation of Nxtra is approximately US$1.2 billion and Carlyle will hold a stake of approximately 25% in the business upon completion of the transaction, with Airtel continuing to hold the remaining stake of approximately 75%.

The transaction is subject to the necessary regulatory approvals, including approval from the Competition Commission of India.

Headquartered in New Delhi, Nxtra from Airtel offers secure data centre services to leading Indian and global enterprises, hyperscalers, start-ups, SMEs and governments.

Nxtra’s nation-wide portfolio of 10 large data centres and more than 120 edge data centres provides customers with co-location services, cloud infrastructure, managed hosting, data backup, disaster recovery, and remote infrastructure management.

India is witnessing a considerable surge in demand for secure data centres as businesses undertake digital transformation and consumer demand for digital services continues to increase.

The expansion of  hyperscalers across the region following the government’s directive on data localization is propelling a lot of this demand, with other market drivers including the growth in user data and increase in cloud penetration.

Nxtra is building multiple large data centres across the country to capture the significant growth opportunities in India.

Last year, the Company commissioned a state of the art data centre in Pune and is building more across Chennai, Mumbai and Kolkata.

Nxtra will use the proceeds from this transaction to continue scaling up its infrastructure and offerings across the country.

Airtel is the largest player in India’s enterprise connectivity segment and serves over 2,500 large businesses and over one million medium and small businesses.

Carlyle has prior experience in data centre ownership through investments in Coresite in the US and Itconic in Spain.

The firm has deep local knowledge within India having been investing in the market since 2000, with notable investments including SBI Life, SBI Card, HDFC, India Infoline, Delhivery and PNB Housing Finance, as well as the recently announced Piramal Pharma Ltd and SeQuent Scientific Ltd.

Carlyle had invested more than US$2.5 billion in India as of March 31, 2020.

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