Globe Telecom Inc. on Monday, April 4, closed a joint venture partnership deal with ST Telemedia Global Data Centres (STT GDC) and Ayala Corporation (AC) for a powerhouse data center which translates to a transaction pre-tax gain of P10.5 billion for the telco.
So far, the three parties have signed and executed all transaction documents, with all closing conditions delivered, the telco disclosed.
The data center partnership marks Globe’s serious entry into the rapidly growing data center space.
Globe, together with STT GDC and AC, aims to fast track expansion efforts and innovation in order to better serve its enterprise clients and expand its product portfolio to grab a larger share of the growing market opportunity.
More importantly, all three companies are aligned in their environmental, social and governance aspirations.
Today, more than 43 percent of STT GDC’s data centers are operating with power derived from renewable sources with an ambitious 2030 carbon-neutral target for all its data centers.
Both STT GDC and AC shall subscribe to new shares in Karman Edge, Inc., a 100 percent owned subsidiary of Globe that will house the carved-out data center business.
The capital infusion of the new partners will result in a post-money valuation in the range of US$350 million.
After executing the share subscription agreement, Globe will remain as the largest shareholder with 50 percent ownership, followed by STT GDC with 40 percent and AC taking up the balance.
Globe will receive proceeds of US$100 million from the transaction with the remaining capital injected to be used by the business for future expansion.
Through this transaction, Globe will recognize a pre-tax gain of P10.5 billion from the partial monetization of its current data center business coupled with the revaluation of the carrying value of Globe’s retained interest.
“We are excited about the future of Globe in the data centerspace," says Ernest Cu, President and Chief Executive Officer.
"With Globe’s deep understanding of its customers, STT GDC’s technical expertise and Ayala’s business reach,this venture is poised to be a significant player in this space for years to come," he pointed out.
Furthermore, "The transaction not only shows Globe’s commitment to delivering value to its shareholders but also proves our ability to generate and unlock value, especially within our core business,” Cu added.
The deal is fully aligned with Globe’s view of the significant opportunity of data centets in the Philippines.
More importantly, it reinforces Globe’s transformation into a leading digital solutions group.