Spark New Zealand finalised a deal to sell 75 per cent of its data centre business to Australia-based Pacific Equity Partners (PEP) for up to NZD584 million ($346.9 million), including performance-based incentives, with the proceeds going to reducing debt.

In a filing, the operator said the deal values the business at NZD705 million. Spark expects to receive NZD486 million in cash, as well as NZD98 million if it achieves certain objectives by end-2027.

Spark CEO Jolie Hodson noted “through this partnership we will realise value for our data centre assets in the short term, while also continuing to participate in the growing market through our 25 per cent retained stake.”

The company will shift its data centre assets and operations to a new standalone business, which will have its own board, management team and debt financing facilities.

Spark operates 11 data centre units across the country with a total built capacity of 23MW.

The transaction is expected to close by year-end, subject to standard regulatory and board approvals.

The sale is part of Spark’s strategic review of non-core assets and efforts to reduce debt, and comes eight months after the operator sold its remaining stake in independent tower unit Connexa to Canada-based CDPQ for NZD314 million.