CDPQ zeros in on CDC, as Telstra weighs asset sales

A stake in CDC is for sale. Picture: iStock

Speculation is mounting that Canadian pension fund CDPQ is closing in on a stake in CDC Data Centres, which has been up for sale through investment bank Barrenjoey.

Bids were due before Christmas for the $2bn-odd interest owned by Commonwealth Super.

Now CDPQ is working on a major deal, which sources believe is CDC.

Also in the mix for the stake is Australian Retirement Trust, which is not thought to be out of the race.

CDC is largely owned by ­Infratil, which is managed by Morrison.

Infratil’s latest accounts puts its 48.2 per cent ownership in CDC at $5.2bn, up from $4.4bn.

DataRoom reported in July that Barrenjoey had been tapped for a possible selldown by one of CDC’s owners, and Commonwealth Super was known to be interested in divesting its holding back then.

Australian infrastructure asset manager Morrison & Co purchased CDC Data Centres in 2016 for about $1.1bn on behalf of Infratil and Commonwealth Super.

In 2020, Commonwealth Super sold half of its 48.2 per cent stake to the Future Fund.

Data centres are one of the most popular investment choices in the market, being in high demand thanks to the rise of artificial intelligence.

Infratil is an Australian and New Zealand dual-listed infrastructure investor. For the six months to September, it reported a $212m loss because of an ­accounting revaluation of its stake in the telco business One NZ.

It said its operating earnings were growing on the back of strong contributions from CDC, One NZ and Wellington Airport.

Private equity

Telstra’s MedicalDirector business has come back into focus for private equity buyers.

It sits within the Telstra Health unit, which the telco now says is non-core.

While it’s expected that the business will come up for sale sometime this year, it’s not clear whether it will be just MedicalDirector or the entire unit.

Telstra bought software company MedicalDirector for $350m from Affinity Equity Partners in 2021 for $350m when it was ­generating about $30m of earnings before interest, tax, depreciation and amortisation annually.

The company offers clinical and practice management solutions to support GPs and other medical specialists to focus on providing high quality care and reducing time on paperwork and administration through electronic prescriptions, options for virtual consultations, patient care plans, real time alerts about drug safety and other functions.

MedicalDirector’s software is used by more than 20,000 clinicians and its platform processes more than 70 million patient consultations.

Working on the sale last time around was Jefferies.

Over the years, Telstra Health has grown through a series of acquisitions and start-ups to become Australia’s largest e-health company.

When Telstra bought MedicalDirector, the Sydney-based company had a contract with the NHS in Britain to provide its Helix cloud software to British GPs.

Affinity Equity bought MedicalDirector in 2016 for $155m from Healius, then named Primary Health Care.

Telstra in the same year signed a $95m deal for a majority stake in Adelaide-based PowerHealth, a global software solutions business founded by Patrick Power.