Brookfield Infrastructure and Ontario Teachers’ to Acquire Compass Datacenters from RedBird Capital Partners and Azrieli Group
DALLAS, June 20, 2023 – Brookfield Infrastructure Partners L.P. and its institutional partners (“Brookfield Infrastructure”) (NYSE: BIP; TSX: BIP.UN) and existing investor Ontario Teachers’ Pension Plan (“Ontario Teachers’”) today announced that they have entered into a definitive agreement with RedBird Capital Partners (“RedBird”) and the Azrieli Group (“Azrieli”) (TASE: AZRG) through which Brookfield Infrastructure and Ontario Teachers’ will acquire Compass Datacenters, LLC (“Compass”). Founder and Chief Executive Officer Chris Crosby and the current Compass management team will continue to lead the company post transaction closing.
Compass has scaled rapidly, particularly with its mega campuses in North America, and has been recognized as one of Inc. Magazine’s 5000 fastest growing companies for the past three years. The new ownership structure will provide Compass with continued strong operational and financial support to execute its sustainable and large-scale data center campuses across multiple regions. Compass has a proven product offering that provides its premier hyperscale customers with speed, flexibility and control to address the needs of the ever-changing technology landscape.
“Digitalization remains a key thematic investment for Brookfield Infrastructure. The need for data storage continues to grow at an exponential rate across the globe, and Compass complements our existing platforms in South America, Europe and Asia Pacific. Compass is a best-in-class data center platform that we have known for years and we are excited to partner with Chris, the Compass team, and Ontario Teachers’ to support Compass on its rapid growth journey.” said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure.
“We are delighted to continue our partnership with Compass, a market leader with a track record of providing customized data center solutions to major technology clients. With the acceleration of technology adoption and advent of emerging technologies such as generative AI, we expect that demand for world-class and sustainable data centers will continue to grow in the coming years,” said Ashvin Malkani, Senior Managing Director, Technology Group, Private Capital at Ontario Teachers’. “We are pleased to welcome our longstanding partner Brookfield Infrastructure as a co-controlling shareholder in Compass. We look forward to working with them, Chris and the rest of Compass’ top-tier management team on the company’s next growth phase.”
“Our original thesis around Compass was building a world class data center platform focused on global hyperscale customers through the development of customized campuses,” said Tyler Alexander, Managing Director at RedBird. “Over a series of success-based investments that enabled disciplined growth, we executed against this thesis and built Compass into one of the preeminent global data center platforms. This outperformance is a credit to Chris Crosby and the full management team, as well as our partners in Ontario Teachers’ and the Azrieli Group.”
“We’re extremely thankful for RedBird and Azrieli’s investment, deep expertise and unwavering support over the years as we’ve built our business. I’m excited to embark on the next chapter of Compass’ evolution in partnership with Brookfield Infrastructure and Ontario Teachers’, two leading investment firms,” said Chris Crosby, Founder and Chief Executive Officer of Compass Datacenters. “The industry is at a critical inflection point today with AI and cloud demand continuing to fuel significant growth. With Brookfield Infrastructure and Ontario Teachers’ strategic expertise and deep financial resources, Compass is ideally positioned to meet growing demand for hyperscale data centers and campuses.”
The transaction is expected to close by year end, subject to customary regulatory approvals.
Goldman Sachs & Co. LLC and Guggenheim Securities, LLC served as joint financial advisors to Compass and RedBird on the transaction. Deutsche Bank Securities Inc. also served as debt financing advisor.
Brookfield Infrastructure engaged BMO Capital Markets and Scotiabank as joint financial advisors and Kirkland & Ellis LLP as legal counsel. TD Securities is serving as financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to Ontario Teachers’. Fried, Frank, Harris, Shriver & Jacobson LLP and Wick Phillips, LLP served as legal counsel to Compass. DLA Piper served as legal counsel to Compass Management. Fried Frank served as legal counsel to RedBird.
About Compass Datacenters
Compass Datacenters, one of Inc. Magazine’s 5000 fastest growing companies, designs and constructs data centers for some of the world’s largest hyperscalers and cloud providers on campuses across the globe. Our corporate culture is predicated on continual improvement and innovation and has enabled us to marry technology with modern manufacturing methods to enhance our ability to consistently deliver our customer’s projects faster, with no sacrifices in quality. Since our inception, our sustainability efforts have encompassed the entire data center from its design to its post-delivery performance, including the efficient use of land, water-free cooling and a focus on Green House Gas reduction in the materials used to build our facilities and in their operation. Compass embraces a long-term perspective with the financial strength of investors Brookfield Infrastructure and Ontario Teachers’ Pension Plan. For more information, visit www.compassdatacenters.com.
About Brookfield Infrastructure
Brookfield Infrastructure is a leading global infrastructure company that owns and operates high-quality, long-life assets in the utilities, transport, midstream and data sectors across North and South America, Asia Pacific and Europe. We are focused on assets that generate stable cash flows and require minimal maintenance capital expenditures. Investors can access its portfolio either through Brookfield Infrastructure Partners L.P. (NYSE: BIP; TSX: BIP.UN), a Bermuda-based limited partnership, or Brookfield Infrastructure Corporation (NYSE, TSX: BIPC), a Canadian corporation. Further information is available at https://bip.brookfield.com.
Brookfield Infrastructure is the flagship listed infrastructure company of Brookfield Asset Management, a global alternative asset manager with over $825 billion of assets under management. For more information, go to https://brookfield.com.
About Ontario Teachers’
Ontario Teachers’ is a global investor with net assets of C$247.2 billion as of December 31, 2022. We invest in more than 50 countries in a broad array of assets including public and private equities, fixed income, credit, commodities, natural resources, infrastructure, real estate and venture growth to deliver retirement income for 336,000 working members and pensioners.
With offices in Hong Kong, London, Mumbai, San Francisco, Singapore and Toronto, our more than 400 investment professionals bring deep expertise in a broad range of sectors and industries. We are a fully funded defined benefit pension plan and have earned an annual total-fund net return of 9.5% since the plan’s founding in 1990. At Ontario Teachers’, we don’t just invest to make a return, we invest to shape a better future for the teachers we serve, the businesses we back, and the world we live in. For more information, visit otpp.com and follow us on LinkedIn.
About RedBird Capital Partners
RedBird Capital Partners is a private investment firm that builds high-growth companies and provides strategic capital solutions to founders and entrepreneurs. Founded in 2014 by Gerry Cardinale, RedBird integrates sophisticated private equity investing with a hands-on business building mandate that focuses on three core industry verticals– Media & Entertainment, Sports and Experiential Consumer, and Financial Services. Throughout his 30-year investment career, Cardinale has partnered with founders and entrepreneurs to build some of the most iconic growth companies in their respective industries. The firm currently manages over $8.6 billion in assets on behalf of a global group of blue chip institutional and family office investors. For more information, please go to www.redbirdcap.com.
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements and information within the meaning of applicable securities laws. The words “believes,” “may” or derivations thereof and other expressions which are predictions of or indicate future events, trends or prospects and which do not relate to historical matters identify forward-looking statements. Forward-looking statements in this news release include statements regarding closing of the acquisition, execution of Compass’ growth plans, continuation of Compass’ track record under new ownership, future data and data center demand, including the impact of AI and cloud computing. Although we believe that these forward-looking statements and the information is based upon reasonable assumptions and expectations, the reader should not place undue reliance on them, or any other forward-looking statements or information in this news release. The future performance and prospects of Compass Datacenters are subject to a number of known and unknown risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated or implied by the statements in this news release include, but are not limited to: whether the acquisition of Compass will be completed within the time frame and on the terms anticipated or at all; the ability to realize financial, operational and other benefits from the proposed transaction; general economic and market conditions; changes in technology which have the potential to disrupt the data center business; and other risks and factors that can be found in the documents filed by the acquiring company, Brookfield Infrastructure with securities regulators in Canada and the United States including under “Risk Factors” in Brookfield Infrastructure’s most recent Annual Reports on Form 20-F and other risks and factors that are described therein. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.