MUFG completes the first data centre acquisition underwriting in EMEA

MUFG completes the first data centre acquisition underwriting in EMEA

Brookfield's acquisition of Data4 SA, one of Europe's leading data centre operators, supported by €2.2 billion of debt financing, represents MUFG's first deal in the rapidly growing data centre sector. Alongside five international banks, MUFG played a leading role as Underwriter, Arranger, Original Lender, Bookrunner and Hedge Provider, providing the funding that facilitated the transaction and will support Data4 SA's expansion and meet the growing demand for data centres across Europe.

The Challenge

The rapid rise in AI, cloud computing and other digital technologies has led to a surge in demand for data centres across Europe. With one of the continent's largest portfolios of data centres, Data4 SA is well positioned to meet growing demand from hyperscalers, wholesalers, system integrators and retail clients.

However, building data centre sites is very capital-intensive, and Data4 SA needed additional investment to fund the next phase of its European expansion.

At the time of Brookfield's acquisition in 2023, data centres were an emerging asset class with limited historical market data to support growth projections within EMEA. This, combined with the size of the deal, meant that Brookfield needed to rely on banks with strong balance sheets and extensive experience in financing pioneering infrastructure projects to mitigate risk and secure the required financing.

Execution

Due to its long-term relationship with Brookfield and its position as a leading infrastructure project finance bank, MUFG was brought on board to support the acquisition of Data4 SA.

From the outset, the team leveraged its extensive infrastructure project finance experience to derisk the acquisition. To address uncertainty about the future of the data centre industry, the team developed a unique financing structure requiring Data4 SA to remain within a defined debt level – aligned with the leverage agreed on day one of the acquisition – and to meet specified growth targets before raising additional funds. This approach provided comfort to all stakeholders, addressed key risks and ensured the deal went ahead. It also balanced risk mitigation with sufficient headroom to support Data4 SA's future growth.

The structure establishes a blueprint for financing future transactions in new and emerging infrastructure sectors.

Results

Brookfield successfully achieved financial close on the acquisition of Data4 SA in July 2023, enabling the expansion of its data centre footprint across Europe. In 2024, MUFG successfully supported the €3.3 billion refinancing of the Data4 SA acquisition, facilitating the ringfencing of both operational and under-construction sites across two separate entities.

Not only does the deal demonstrate MUFG's ability to finance complex transactions within new and uncertain infrastructure areas, but it also shows the trust clients place in MUFG to understand the challenges at hand and see deals through to completion.