Apollo Funds plans to “significantly scale” its investments in areas like digital infrastructure
Asset management company Apollo Global Management has purchased a majority stake in Stream Data Centers (SDC), aiming to scale the business to support escalating data center demand in the United States.
Financial terms of the deal were not disclosed. Apollo is purchasing the stake from parent company Stream Realty Partners (SRP).
The 25-year-old data center operator has more than 20 campuses and has a “robust near-term pipeline,” according to Apollo. SDC also controls more than 4 GW of long-term “powered land” — where power capacity is committed, but no data center is yet built. With Apollo’s backing, “SDC plans to scale platform-wide development to meet accelerating demand from hyperscale cloud and AI providers across key Tier 1 and Tier 2 U.S. markets,” the company said in a release.
“Stream Data Centers represents a landmark digital infrastructure transaction for Apollo,” said Joseph Jackson and Trevor Mills, Apollo partners, in a joint statement. “With deep development expertise and a valuable long-term land fund in key growth markets, we believe SDC is uniquely positioned to serve the infrastructure needs of the world’s most sophisticated technology customers. Apollo will bring scaled capital and structuring capabilities to help drive recurring origination across our ecosystem. We look forward to partnering with SDC as a key operating platform to deliver next-gen capacity at scale.”
Apollo said that with its backing, SDC is “positioned to execute on a multi-gigawatt pipeline while enabling Apollo Funds … to potentially deploy billions of dollars into next-generation digital infrastructure.”
Stream will get a new influx of cash for its existing data center land fund to speed up site development for 650 MW of near-term power capacity at data center campuses in the Chicago, Illinois; Atlanta, Georgia; and Dallas, Texas area, according to Apollo. The land fund will be managed by a subsidiary of Apollo Funds.
According to SDC’s website, its Chicago site consists of development of two hyperscale facilities in Elk Grove Village, which are fully leased and represent more than 53 MW of capacity. The company has multiple campuses in the Atlanta area, including a 420-acre site with 320 MW of planned IT capacity and a 460-acre campus with 320 MW of planned IT capacity. SDC has a particularly large presence in the Dallas area, with sites in development that total more than 1,000 acres
SDC’s management team will continue to lead the business, and will retain a minority stake in the company. Apollo expects the transaction to close this year.
“After more than two decades of delivering exceptional data center experiences, SDC has created a building and operating model with very strong fundamentals based on collaborative, enduring customer relationships,” said Michael Lahoud and Paul Moser, co-managing partners of Stream Data Centers, in a joint statement. “This symbiotic relationship with Apollo amplifies that existing strength, offering access to the capital required to significantly scale our developments at the rate hyperscale customers demand. We look forward to working with the Apollo team to execute on our pipeline — and we extend our sincere gratitude to SRP for providing the firm foundations that have helped SDC become the organization it is today.”
Apollo said that by its estimates, data centers will require “several trillion dollars of global investment over the next decade, driven by a secular global industrial renaissance, with substantial investments required in power, facilities and semiconductor chips.”
The company said that in the past three years, it has put about $38 billion in infrastructure investments including computing capacity, digital platforms and renewable energy, and that it plans to “significantly scale its investment in these areas in the coming years,” through SDC and other vehicles.
