AirTrunk IPO: Everything you need to know about AirTrunk

What do we know about the AirTrunk IPO?

AirTrunk, an Australian data centre firm, is actively exploring going public on the Australian Securities Exchange (ASX). AirTrunk is currently majority owned by Macquarie Asset Management and PSP Investments. However, on October 5 the Australian Financial Review reported that Goldman Sachs and Macquarie Capital have been picked to serve as joint lead managers on the potential listing.

If AirTrunk does list, it could signal a shift in strategy for the industry. In recent years, some of the largest public data centre firms have been taken private through multi-billion mergers and acquisitions.

However, recent demand for data storage and processing from companies like Amazon Web Services, Google and Microsoft has left hyperscale centres scrambling for the capital needed to expand development.

Market analysts suggest continued growth for large data centres will require more capital than some private equity firms may be willing to provide. If AirTrunk moves forward with an IPO, it could mark a shift in the industry back towards public listings, especially as the IPO market as a whole begins to revive.

Already in 2023, AirTrunk secured a $2.9 billion sustainability-linked loan to help scale.

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How to trade the AirTrunk IPO

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What is AirTrunk?

AirTrunk works to develop and operate large-scale data centre campuses across the Asia Pacific region and Japan with operations in Australia, Hong Kong, Japan, Malaysia and Singapore. The company primarily caters to large tech companies with its hyperscale data centres.

Compared to enterprise data centres, hyperscales are larger, classified at more than 5,000 servers and 10,000 square feet. Hyperscale centres often boast faster network connections and greater energy efficiency than their enterprise counterparts.

AirTrunk opened its first centres in Sydney and Melbourne in 2017 and has opened five more since then across Australia, Singapore, Hong Kong and Japan. Already AirTrunk has become one of the largest data centre players in Tier-1 markets for the region.

How much is AirTrunk worth?

AirTrunk is expected to be valued at more than $6.4 billion (AU$10 billion) following its IPO on the ASX, according to the Australian Financial Review. AirTrunk was most recently valued at more than $3 billion in 2022 when PSP and MAM acquired an 88% stake in the company.

Is AirTrunk profitable?

As a subsidiary of Macquarie, AirTrunk’s exact revenue figures are not made public, however, there is some information to be gleaned from AirTrunk’s sustainability-linked loan deal launched earlier this year.

AirTrunk has received over $3.8 bn in loans from nearly a dozen banks in 2023. During the dealings, AirTrunk told potential debtors it had tripled contract revenue within two years after being acquired by Macquarie, the Australian Financial Review reports.

While AirTrunk is actively building more billion-dollar hyperscale data centres with this debt capital, it’s safe to assume banks expect the firm to make enough to pay down its debts.

What is AirTrunk’s business model?

AirTrunk’s business model focuses on the development of new hyperscale data centres which it can then lease or license to tech companies needing more power and space. AirTrunk is pursuing rapid growth. From the billions of dollars in new loans to this potential IPO, the company is pulling in as much capital as possible to continue expansion.

Based in Australia, AirTrunk’s portfolio focuses on the Asia-Pacific market. AirTrunk is currently building two new centres, one in Malaysia as a 150+ MW facility and its second in Japan with a power capacity of 110 MW. This is a smaller version than its first centre in Tokyo with a 300+ MW capacity.

When fundraising in private markets, AirTrunk has had to cite new contracts with customers as a justification for more funding, so the ability to fundraise through public markets post-IPO would allow the company to acquire funds and court new customers at the same time.

The demand for hyperscale data centres continues to grow with the increased application of AI and cloud-computing technology. Tier-1 technology firms require ever-increasing space to maintain their growing operations.

Who are AirTrunk’s competitors?

AirTrunk’s competitors include a number of hyperscale data centre developers in the Asia-Pacific and Japan regions. Some of the largest data centre firms active in the region include GDS Holdings, Global Switch, Mapleton Industrial Trust, NEXDTC and Keppel DC REIT, as compiled by Data Centre Magazine.

Operating mainly in China and Southeast Asia, GDS Holdings operates over 100 data centres, but they’re smaller than AirTrunk’s hyperscales, and the publicly traded company as a whole currently has a market cap of about $2 billion. NEXTDC (ASX:NXT) is valued at slightly over $4 billion and operates 11 Tier 3 and 4 data centres across Australia.

Global Switch owns and operates Tier-1 facilities in both Europe and Asia-Pacific, including Sydney, Hong Kong and Singapore. However, the company announced in August it is looking to sell its Asia-Pacific portfolio for about $3 billion.

Mapletree (SGX:ME8U) is a Singaporean real estate investment trust whose portfolio focus heavily on data centres in Singapore and North America and is valued at $3.9 bn. Keppel DC (SGX:BN4) is another Singaporean trust holding 23 data centres in Asia-Pacific and Europe currently valued at $2.6 billion.

Who owns AirTrunk?

AirTrunk is majority owned by Macquarie Group (ASX:MQG) and PSP (TK), two Australian financial services and asset management firms. Together they own a combined 88%. AirTrunk founder and CEO Robin Khuda owns about 10%, and the final 2% is spread across company management.

AirTrunk management team

Robin Khuda – Founder & CEO
Michael Juniper – Deputy CEO
Prashant Murthy - CFO
Damien Spillane – CIO
Paul Slaven – CDO
Dana Adams – COO
Nori Matsushita – Head of Japan
KC Li – Head of Hong Kong
Kweng Ha Ko – Senior Advisor, Singapore

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