Starwood Capital has injected $850m (€790m) to help Echelon Data Centres expand in Ireland and the UK.
The private investment firm said the investment is being made through Starwood Opportunity Fund XII and Starwood Real Estate Income Trust for a 50% interest in Echelon.
The transaction gives Echelon an enterprise value of €2.5bn, and the company has also secured a new €900m debt facility from Morgan Stanley and United Overseas Bank.
Founded in 2016, Echelon has 140MW of capacity that is either operational or in late-stage construction, including a fully pre-committed 91.4MW hyperscale campus in Dublin. The company also has a landbank of more than 500MW, of which 168MW is in advanced stages of agreement with occupiers and is expected to commence construction in the first half of 2024.
Starwood Capital has emerged as a key player in the global data centre market, investing $8bn over the past five years in developing 1.5GW of capacity. The firm recently launched Starwood Digital Ventures to oversee its data centre investment strategy and activities globally.
Lorcain Egan, co-head of Europe at Starwood Capital, said: “Echelon has been delivering critical infrastructure to support the growth of some of the world’s most dynamic technology companies and we look forward to continuing to partner with them in that mission.
“For Starwood Capital, this significant and strategic investment continues our long-term focus and capital deployment into a core sector for our European business.”
David Smith, managing director and head of data centres in Europe at Starwood Capital, said: “This investment builds on our expertise and track record in the sector, including our recent launch of Starwood Digital Ventures, a platform dedicated to our growing global data centre investment strategy.”
Barry Sternlicht, chairman and CEO of Starwood Capital, said: “We are confident that with the Echelon team and Starwood Digital Ventures we will continue to find further opportunities to deploy capital into transactions with attractive risk-adjusted returns for our investors, both in Europe and the US, where we have an additional 600MW of projects in our pipeline, bringing our total global platform to [approximately] 1.5GW.”
Niall Molloy, CEO and founder of Echelon Data Centres, said: “Starwood Capital’s scale, access to capital and track record position Echelon incredibly well to service our customers’ growth requirements on a global basis. We look forward to the continued growth of the business and expansion into new European markets and beyond.”
Trevor Whelan, CIO of Echelon Data Centres, said: “Today’s announcement is a huge milestone for the Echelon team on the journey to establishing a global data centre platform centred around large-scale campuses, and vertical integration with power generation.
“It is also a milestone day for Starwood Digital Ventures, and we are excited to be one of the foundation blocks as they rapidly grow their Digital Infrastructure business.”
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