Gulf Data Hub Considers Sale of Minority Stake to Meet Rising Demand for Digital Infrastructure
Gulf Data Hub Considers Sale of Minority Stake to Meet Rising Demand for Digital Infrastructure
United Arab Emirates-based Gulf Data Hub is exploring the possibility of selling a minority stake in the company to capitalize on the increasing global demand for digital infrastructure, sources familiar with the matter revealed.
The privately-held firm has attracted interest from international private equity firms and is currently working with JPMorgan Chase & Co. on the potential deal, according to the sources who preferred to remain anonymous due to the confidential nature of the information.
Established in 2012, Gulf Data Hub is aiming to finalize the sale by the third quarter of this year, with hopes of fetching up to $1 billion for the stake, the sources added. However, no final decisions have been made regarding the timing and valuation of the deal. Representatives for JPMorgan and Gulf Data Hub declined to comment on the matter.
The move comes amidst a surge in deals activity in the data-center sector, with infrastructure funds and companies looking to tap into the growing demand for cloud services. Key deals in the industry include Nokia Oyj’s $2.3 billion bid for Infinera Corp and GDS Holdings Ltd.’s sale of a stake in its data-center business outside China to a group of alternative asset managers.
According to a recent Linklaters report, close to $22 billion has been invested in the sector in the first five months of this year globally, highlighting the crucial role that data centers play in supporting the expanding digital economy.
Regionally, the UAE and Saudi Arabia are striving to become the hub for artificial intelligence, leading to a race to build advanced data centers to support the technology. Gulf Data Hub, owned by founder Tarek Al Ashram, currently operates five data centers and has 15 under construction across the wider Middle East, collaborating with tech giants like Microsoft Corp. and Oracle Corp.
The company faces competition from Khazna, owned by G42, the Abu Dhabi technology group chaired by UAE National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan.
As the demand for digital infrastructure continues to grow, Gulf Data Hub’s potential sale of a minority stake could position the company to meet the evolving needs of the digital economy and solidify its presence in the market.