Spark confirms sale of 75% stake in datacentre business

Tuesday, 12 August 2025

Spark’s share price has halved over the past two years as it struggles for growth in a post-UFB world.

Spark has agreed to sell a 75% stake in its datacentre business to Sydney-based private equity firm Private Equity Partners for about $500 million.

The announcement confirms media speculation over the past two days that a deal was close.

The company once touted operating data centres as one of its biggest growth opportunities. But it announced in May that it was seeking a partial sale.

Spark previously elected to sell off its cellphone tower infrastructure in two tranches.

Industry insiders said Spark had found the market increasingly competitive.

Spark chief executive Jolie Hodson said the transaction valued the datacentre business at “up to $705m”.

The company told investors it expected to receive cash proceeds of about $486m when the deal was finalised, with “additional deferred cash proceeds of about $98m contingent on the achievement of certain performance milestones by the end of the 2027 calendar year”.

The proceeds of the sale would be used to reduce Spark’s debt, the company confirmed.

Spark shares were little changed at $2.62½ in mid-morning trading on the NZX in the wake of the announcement.

Spark said it intended to continue participating in “the growing market” through its remaining 25% stake in the datacentre business, which will be renamed DC Co.

It has in the past sold off infrastructure in stages.

In 2022, it sold a 70% stake in its mobile phone towers to a Canadian pension fund for $900m, while saying it remained “a key strategic partner” in that business through its 30% stake.

It sold that remaining shareholding two years later for $314m.

Spark’s asset sales have come as it struggles to grow sales and earnings in the post-UFB world created by its de-merger from Chorus in 2011 and New Zealand’s investment in ultrafast broadband.

Its share price has roughly halved over the past two years.

More recently the company, which will report its annual result tomorrow week, is understood to have come under additional pressure from cost-cutting by its public sector clients and aggressive discounting by Australian-owned 2degrees in the business market.