Kao Data – a specialist developer and operator of data centers engineered for AI and advanced computing – announced it had completed a new £206 million debt raise, with an accompanying accordion facility extendable to £356 million, via one of the world’s leading lenders to the data center sector, Deutsche Bank.
This announcement marks a significant step forward for Kao Data. It provides debt financing to fast-track its new contracted developments with customers across the cloud, AI, and financial services and the build-out of its KLON-06 data center in Slough.
Deutsche Bank – which has experience in structuring sustainable, digital infrastructure assets – has provided financing to drive the expansion of the business in line with growing customer demand for GPU-powered computing. And the funding will support Kao Data’s expansion into next-tier markets across the UK and continental Europe. Late last year, Kao Data also established a new capital structure with its shareholders Infratil Ltd, Legal & General Capital, and Goldacre Noé Group, which will provide incremental equity investment to accelerate Kao Data’s strategic growth plans.
This debt facility, for which Deutsche Bank has been named mandated lead arranger and sole underwriter, will enable Kao Data to consolidate its debt with a single, large financial services organization, refinancing those existing lenders who have played an integral role in the advancement of its secure, highly scalable, and sustainable data center platform during the last decade.
So a proportion of the new funding will repay Downing LLP, a UK-based responsible investment management firm founded in 1986, which invests across a range of sectors, including renewable energy, infrastructure, healthcare, operational real estate, and property development. And Downing has partnered with Kao Data since its earliest development debt requirements and has subsequently helped fund its growth from a single-site development to a UK-wide platform.
Kao Data’s new financial capability with Deutsche Bank reinforces an exceptional twelve months for the organization, which has secured several key customers from within the AI, hyperscale cloud, research, and financial services sectors. In May 2023, Kao Data also announced a new £350 million investment into a state-of-the-art Greater Manchester data center, followed by the completion of its KLON-02 facility in Harlow in November.
Kao Data’s advanced data center portfolio now includes over 160MW of IT load, either currently operational, under development, or planned – all underpinned by the highest energy efficiency, sustainability, and environmental, social, and corporate governance (ESG) credentials.
KEY QUOTES:
“The success of our new debt raise is testament to the growth of our business, our reputation for industry-leading operations and technical delivery, and both the scale and demand for world-class infrastructure, engineered for AI. I’d like to thank our lenders for their trust in our philosophy and ambition, which has been fully vindicated during the last decade, and all who have played an instrumental part in the evolution of the Kao Data platform. Looking forward, we are delighted to be working with one of the world’s leading digital infrastructure lenders in Deutsche Bank.”
– Matthew Harris, CFO, Kao Data
“Since our first meeting with the company’s founders in 2015, we’ve been early believers in Kao Data’s expertise, mindset, and its vision for growth. We were delighted to provide Kao Data with growth capital funding in 2017 and saw an attractive opportunity to support them in the development of their sustainable data centre platform. During the term of our investment, Kao Data has proved itself as an excellent example of what we look for in the businesses we like to back: a high-quality management team with a compelling business case. We are proud to have helped the company establish a firm foothold as a leader in one of the world’s most competitive, international data centre markets, whilst also delivering a successful return for our funds.”
– Tom Phillips, Head of Institutional Business Development, Downing
