The business is valued at up to $416 million, and Spark said it expects to receive $287 million in cash, as well as $57.8 million if certain performance-based criteria are met by the end of 2027
In sum – what to know:
Deal finalized – Spark New Zealand has agreed to sell a 75% interest in its data center business to Pacific Equity Partners (PEP) for up to $346.9 million.
New DC standalone business – As part of the transaction, Spark will shift its data center assets and operations to a new standalone business called DC Co.
It’s official — Spark New Zealand announced today that it has agreed to sell a 75% interest in its data center business to Pacific Equity Partners (PEP) for up to NZD584 million ($346.9 million).
The business is valued at up to NZD$705 million ($416 million), and Spark said it expects to receive NZD486 million ($287 million) in cash, as well as NZD98 million ($57.8 million) if certain performance-based criteria are met by the end of 2027. Proceeds will be used to reduce group net debt.
Bringing in a co-investor could also help the company secure the capital to deliver a planned 120MW of new data center capacity, while also reducing financial strain amid ongoing market headwinds. The expansion would dramatically scale its role in New Zealand’s cloud and data hosting market, positioning the company to capture rising demand from enterprises and hyperscalers alike.
Spark CEO Jolie Hodson said, “We are pleased to reach this agreement with PEP, one of Australia’s leading private capital managers with a strong track record of growing businesses across New Zealand and Australia. Through this partnership, we will realize value for our data centre assets in the short term, while also continuing to participate in the growing market through our 25% retained stake — creating further value for our shareholders over the long term.”
As part of the transaction, Spark will shift its data center assets and operations to a new standalone business with its own board, management team, and debt financing facilities. According to Hodson, the new business — called DC Co — has more than 23MW of built capacity at 11 operating data center facilities across the country, as well as advanced plans in place for a greenfield development on Auckland’s North Shore and further extensions in South Auckland.
“This strategic investment allows DC Co to leverage its strong market position as a high-quality data center network provider, to capture a significant share of the expected growth in the local data center market and position itself as a competitive option for international customers looking to grow their services in New Zealand,” she continued.
The sale process comes as Spark continues to reshape its asset portfolio and shore up its balance sheet. Earlier this year, the company sold its remaining ~17% stake in tower operator Connexa to Canadian pension fund CDPQ for NZ$311 million (US$184 million). Connexa is now jointly owned by CDPQ and Ontario Teachers’ Pension Plan.
The transaction is expected to close by year-end, subject to standard regulatory and board approvals.
