Spark announces sale of 75% of data centre business

• Spark to sell 75% stake in data centre business to Pacific Equity Partners
• Transaction values business at up to $705 million, representing 30.8x FY25 pro-forma EBITDA
• Proceeds of $486 million to be used to reduce group net debt
• Spark to retain 25% stake, continue participating in growing data centre market

Spark New Zealand has announced it has entered into an agreement to sell a 75% interest in its data centre business to Pacific Equity Partners (PEP). The transaction values the business at up to $705 million, representing a FY25 pro-forma EBITDA multiple of 30.8x. Spark expects to receive cash proceeds of approximately $486 million at completion, with additional deferred cash proceeds of up to $98 million contingent on the achievement of certain performance-based objectives by the end of 2027. The proceeds will be used to reduce Spark's group net debt. As part of the transaction, Spark will move its data centre assets and operations into a new stand-alone company, 'DC Co', which will have its own board, management team, and debt financing facilities. The introduction of PEP as a capital partner will secure a funding pathway for DC Co to build out Spark's planned 130MW+ data centre capacity development pipeline, as cloud and AI uptake continues to increase demand for data storage and compute in New Zealand. Spark will retain a 25% stake in DC Co, allowing it to continue participating in the growing data centre market.

The strategic investment with PEP positions DC Co, Spark's data centre business, for transformative growth, delivering essential infrastructure that will support cloud and AI adoption and data sovereignty in New Zealand.