Almost six months after Private Equity (PE) firms submitted bids to acquire data center company Global Switch (SWITCH), discussions seem to have come to a halt.
According to a Bloomberg report, quoting people familiar with the matter, tightening financing conditions and lower-than-expected bids are the main reasons for the sale talks to have come to a standstill. Deal talks between Global Switch’s Chinese owners and prospective bidders aren’t moving forward as the parties have been unable to bridge a significant value gap from the initial $10 billion sought by the sellers, the people said.
While some bidders haven’t walked away from the discussions, access to financing and differing valuation estimates remain key hurdles to any transaction, the people said, asking not to be identified because the matter is private. Founded in 1998, Global Switch owns and operates 13 data centers across Europe and Asia Pacific comprising about 428,000 square meters, according to its website.
Private equity firms including EQT AB and KKR & Co. (KKR) were among bidders on a short list to buy data center company Global Switch (SWITCH). Gaw Capital, PAG and Stonepeak Partners were also selected to be in the next round of bidding for Global Switch, according to traders, who cited a Bloomberg report. Some bidders were looking at the possibility of teaming up for an offer.
The slowdown in talks represents yet another twist in the long-running attempts by owners including Jiangsu Shagang Group Co. and Avic Trust Co. to sell the company. The group has explored a range of potential deals in recent years, including an initial public offering, a stake sale and a full sale of the business.
No final decisions have been made and talks could accelerate over the coming months, the people said. Representatives for Global Switch and Jiangsu Shagang declined to comment, while Avic Trust didn’t immediately respond to requests for comment.
Bloomberg first reported that Equinix and buyout firms KKR and Blackstone (BX) were said to be among buyers considering bids for data center operator Global Switch (SWITCH). In May Bloomberg also reported that Global Switch’s Chinese owners were poised to kick off a sale process for the data center operator.
