Singapore’s ST Telemedia Buys Stake In Philippines’ Globe Data Center Unit In Deal Valued At $350 Million

Singapore-based ST Telemedia Global Data Centres has formed an alliance with Globe Telecom—backed by the Philippines’ oldest conglomerate Ayala Corp.—to expand its footprint in the Philippines amid booming demand for server space from e-commerce and other digital platforms.

ST Telemedia GDC has agreed to subscribe to a 40% stake in Globe’s data center unit KarmanEdge, while Ayala Corp. will take a 10% stake in a deal that values KarmanEdge at $350 million, Globe said in a statement on Wednesday. This will be the maiden investment by the Singapore data center firm in the Philippines.

Globe, which will remain KarmanEdge’s biggest shareholder with a 50% stake, will receive $100 million from the transaction, and use the additional capital injections from ST Telemedia and parent Ayala Corp. for future expansion. The partners aim to boost KarmanEdge’s capacity to 100 megawatts (data center capacity is typically measured in terms of their electricity consumption) in the coming years from 20 megawatts currently to tap growing demand from hyperscalers, ST Telemedia GDC said in reply to queries from Forbes Asia.

“Many of ST Telemedia GDC’s key data centre customers including the Western and Chinese hyperscalers have been more active especially in Southeast Asian markets, which include the Philippines,” ST Telemedia said. “In today’s climate of increased telecommuting, content consumption and broad digitisation of society, both hyperscale and enterprise customers are facing a significant demand on their services globally and locally.”

The transaction, which is expected to be completed in the first quarter, comes as international players step up their investments in the Philippines, where the digital infrastructure is insufficient to meet booming demand for data center space in the country. Singapore-based SpaceDC  said last month it will build a 72 megawatt hyperscale data center east of the Philippine capital of Manila, while Digital Edge, another Singapore player, announced in December that it’s developing a 10 megawatt facility in the greater Metro Manila area.

“The Philippines is an underserved market with huge demand for data center services,” Ernest Cu, Globe president and CEO, said in a statement. “Our partnership with ST Telemedia GDC and Ayala Corp 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 centers in the country.”

Backed by Singapore state investment firm Temasek Holdings, ST Telemedia GDC is one the world’s fastest-growing data center operators, with over 140 facilities across China, India, Singapore, South Korea, Thailand and the U.K. Its expansion in the Philippines will further bolster its presence in Asia, Bruno Lopez, president and CEO of ST Telemedia GDC said in a statement.

“With Globe’s well-established digital solutions platform and our data center expertise, we are confident that through our partnership, we can build a leading data center platform in the country,” Lopez said. “This venture will enhance our offerings to support enterprises as they grow their digital presence in the Philippines and the wider Asia Pacific region.”

Partly owned by Singapore’s largest telecommunications firm Singtel, Globe is among the subsidiaries of Ayala Corp., which traces its roots to the Spanish colonial era. In 1834, billionaire Jaime Zobel de Ayala’s grandfather started a distillery in Manila and then expanded into banking, hotels, real estate, renewable energy and telecommunications.

Ayala, 87, was ranked the country’s fifth-richest person with a net worth of $3.3 billion when the list of the Philippines’ 50 Richest was published in September. He retired in 2006, and his eldest son Jaime Augusto Zobel de Ayala, who had been the CEO of Ayala Corp. since 1994, succeeded him as chairman. Last year, Fernando Zobel de Ayala took over as CEO, while his elder brother Jaime Augusto continues to serve as chairman.