Deal evaluation underway
Koch Inc. is exploring a possible sale of Edged, the data center developer it helped found, in a process that could culminate in a transaction valued at more than $15 billion, according to a market report. The company has retained Goldman Sachs Group Inc. to canvass potential buyers, and the advisory bank has presented multiple bids to Koch as the parties continue discussions without having reached a final deal.
Assets and technology
Edged was established in partnership with entrepreneur Jakob Carnemark to develop, build and operate data centers utilizing a waterless cooling technology. The operating portfolio comprises seven data centers, among them a 169-megawatt facility located in Atlanta. Additional projects are in various stages of development, expanding the companys capacity pipeline.
Market backdrop
Demand from major technology companies for expanded computing capacity has accelerated construction of data center capacity around the world, and large institutional investors have become increasingly active in financing such projects. The broader data center investment landscape includes multi-billion dollar initiatives by major asset managers and private equity firms.
Examples cited in the market report include a 1-gigawatt data center project in Texas where BlackRock Inc. has partnered with Meta Platforms Inc., with development costs of roughly $14 billion; KKR & Co. raising in excess of $10 billion to form a company focused on designing, building and operating AI infrastructure; and Blackstone Inc. filing for an initial public offering of a new vehicle to acquire data center assets.
Current status
Sources say Koch has received multiple bids for Edged and is reviewing interest, but discussions are ongoing and nothing has been finalized. The involvement of a major advisory bank underscores the size and complexity of the potential transaction.
What to watch
- Whether Koch accepts a bid and the final structure and valuation of any deal.
- The identity and financing approach of any buyer or group of buyers for Edged.
- Progress on the companys projects in development, which will factor into valuation and integration considerations.