Globe, STT GDC and Ayala enter into $350M venture
Singapore and Manila, Philippines: 2 March 2022 – Globe (PSE:GLO), a leading digital solutions platform in the Philippines with major interests in telecommunications, financial technology, digital marketing solutions, venture capital funding for startups, entertainment, and virtual healthcare announced the formation of a joint venture partnership with ST Telemedia Global Data Centres (STT GDC), one of the world’s fastest-growing data centre providers and Ayala Corporation (AC), the Philippines’ leading conglomerate, for the development, construction and operation of data centre projects in the Philippines.
Under the agreement, both STT GDC and AC shall subscribe to new shares in KarmanEdge, Inc., a 100% owned subsidiary of Globe that will house the carved-out data centre business, which has the potential to expand by up to 100MW capacity in the mid to long term. Post execution of the share subscription agreement, Globe will remain the largest shareholder with a 50% ownership, followed by STT GDC with 40% and AC taking up the balance.
This venture will help accelerate Globe’s efforts to scale up its capacity and capabilities in the data centre space and address the significant and growing demand for data centre services in the country, both from local enterprises and global hyperscalers, including some of the biggest content providers in the world. This deal also allows Globe and Ayala to partner with one of the world’s largest data centre operators and importantly, a partner that also aligns with its environmental, social and governance aspirations. Today, more than 43% of STT GDC’s data centres are operating with power derived from renewable sources with an ambitious 2030 carbon-neutral target for all its data centres.
The transaction is fully aligned with Globe’s view of the value and significant opportunity of the data centre space in the Philippines, given current market demand and the country’s strategic location in the region. More importantly, it reinforces Globe’s transformation into a leading digital solutions group that provides connectivity and solutions to power and enable a robust digital ecosystem for the Filipino.
Globe, through its wholly-owned subsidiary, Innove Communications, Inc., has been operating data centres in the country since 2001 and has since expanded its portfolio nationwide, serving both its internal needs, local enterprises and global hyperscalers. Globe data centres are globally competitive, advanced, standard-compliant, and highly secure facilities strategically located across the archipelago offering world-class data, network, telecommunication, and IT services ranging from carrier-neutral colocation space, managed security, mission-critical applications, and cloud solutions.
“The Philippines is an underserved market with huge demand for data centre services. Together with STT GDC’s deep expertise and experience in developing, owning and operating data centres globally and AC’s significant business reach, relationships in the country and in the region, we believe that this Joint Venture will be well-positioned to become the leader in the data centre space in the Philippines,” said Ernest Cu, Globe President and Chief Executive Officer. “Our partnership with STT GDC and AC will be a step forward in our ambition to transform the country’s digital infrastructure by building and operating the most energy efficient and connectivity-rich data centres in the country,” he added.
“We are thrilled to partner with Globe as we expand our global data centre platform into the Philippines, further bolstering our strong presence within Asia. With Globe’s well-established digital solutions platform and our data centre expertise, we are confident that through our partnership, we can build a leading data centre platform in the country. This venture will enhance our offerings to support enterprises as they grow their digital infrastructure in the Philippines and the wider APAC region,” said Bruno Lopez, President & Group CEO, ST Telemedia Global Data Centres.
“We are excited to support this initiative and leverage our wide relationships to maximize opportunities for the Venture. We believe we have found in STT GDC the right partner to help us scale up and play a major role in the development of the Data Centre Industry in the country,” said Fernando Zobel de Ayala, Ayala Corporation President and Chief Executive Officer.
The capital infusion by the new partners will result in a post-money valuation of KarmanEdge, Inc. at over US$350 million. Globe will receive proceeds of US$100 million from the transaction with the remaining capital injected to be utilized by the business for future expansion & growth.
The transaction, which is expected to be completed in Q1 2022, will be subject to customary closing conditions, including relevant regulatory approvals.