UPDATE May 12th 2025: The Australian reports that Spark’s data centre portfolio has attracted the attention of Stonepeak, an investment company headquartered in New York. Stonepeak describes its ‘thematic’ investment approach as aiming ‘to deliver strong long-term performance by investing in businesses supported by favourable trends’. Currently, its digital infrastructure portfolio includes 16 platforms with assets in more than 40 countries. Further details from The Australian
May 1st 2025: Spark New Zealand, the country’s largest telecommunication company, is reported to have launched an auction to find a co-investor for its data centre portfolio. which could be worth as much as $NZ1.2 billion ($1.1 billion). Spark is listed on both the NZX and the ASX and it is reported in the Australian Financial Review that Jarden has been mandated to seek buyers for a stake in the platform. Sources report that Jarden has started to mail flyers to infrastructure funds, asking them to prepare bids for a c.50% stake in Spark’s platform which offers a capacity of 22 megawatts with more than 118MW in development capacity in hub cities such as Auckland. Spark sees its data centre platform as a big growth area, due to the rise of AI and cloud technologies, but earlier this year indicated it would explore a selldown to fund the $NZ1 billion required for future investment.
New Zealand-based infrastructure bankers are overseeing the sale alongside Sydney telco managing director Yan Hui Tan. According to specialist Macquarie analysts, the Spark deal could make $NZ47 million EBITDA this financial year. They predicted a price-tag of between $NZ609 million (based on AirTrunk’s 21-times multiple) to $NZ1.2 billion (NextDC’s 42-times) – or $NZ290 million at the lower end. Telco data centres are not seen as high-growth as is the hyperscale model of AirTrunk, and they fetch therefore much lower valuation multiples. Spark is capitalised at $3.6 billion on the ASX.
Spark’s market position may explain some of its current search for investment. While it is the largest telco in New Zealand it has been losing market share to rivals such as One NZ, and 2degrees. Its shares have fallen 55.5 per cent over the past year. It is reviewing its capital structure, and to maintain an A- credit rating would require its leverage ratio to fall from 2.3-times at December 31 to 1.7-times by Christmas according to Macquarie analysts in a March research note. The analysis indicated that to achieve this would require about $NZ600 million in asset sales.
Sales of data centre assets are the latest iteration in telecommunications giants’ move to sell infrastructure assets to pay down debt and unlock shareholder value. Spark’s move follows the divestment of its remaining 17% stake in mobile towers business, Connexa, completed in February 2025. It is not alone in seeking to sell its data centres – Telstra tested the investor appetite for its two assets earlier in 2025. And, more recently, in April, it has been reported that Blackstone might sell two AirTrunk datacenters in Australia.
Further details at: https://www.afr.com/street-talk/new-zealand-s-biggest-telco-spark-launches-data-centre-sale-20250430-p5lvgv
