Starwood Capital makes strategic investment in Echelon Data Centres
Author: Isha Jain
Starwood Capital Group, a global private investment firm focused on real estate, has announced that a controlled affiliate had made a strategic investment in Echelon Data Centres.
Echelon was founded in 2016 and has grown to become one of the leading data centre developers in Ireland and the United Kingdom, providing large-scale facilities to support the growing global demand for data and computing resources. Echelon currently has 140MW of capacity that is either operational or in late-stage construction, including a fully pre-committed 91.4MW hyperscale campus in Dublin. In addition, the company has a strategic landbank in excess of 500MW, of which 168MW is in advanced stages of agreement with occupiers and expected to commence construction in H1 2024.
The transaction will see Starwood Capital commit approximately $850 million through Starwood Opportunity Fund XII and Starwood Real Estate Income Trust, becoming a 50% shareholder in Echelon and providing material capital for its continued growth. The investment values the company at approximately €2.5bn enterprise value. The company’s capitalisation is further primed for growth through a new €900 million debt facility provided by Morgan Stanley and United Overseas Bank.
Over the past five years, Starwood Capital has built a significant global data centre business committing approximately $8bn of capital across 1.5GW of capacity in various stages of development. The firm recently launched Starwood Digital Ventures to oversee its data centre investment strategy and activities globally.
Deutsche Bank acted as lead financial advisor and Morgan Stanley acted as financial advisor for Starwood Capital, while Kirkland & Ellis and Arthur Cox acted as legal counsel.
Eastdil Secured acted as lead financial advisor and Nomura acted as financial advisor for Echelon Data Centres, and William Fry acted as legal counsel.
Morgan Stanley and UOB acted as Mandated Lead Arrangers on the financing. Allen & Overy, Arthur Cox and A&L Goodbody acted for Echelon Data Centres on the financing and due diligence.
