TPG Pursues $5 Billion Acquisition of UK Data Centre Group Ark

How the deal came about

Elliott Investment Management acquired Ark Data Centres in 2012, initiating a holding period that has outlasted typical private equity ownership cycles. European real estate investor Revcap participated in the initial financing and retained a minority stake. Under Elliott’s ownership, the company expanded its footprint from a single primary location in Wiltshire to 27 facilities across the United Kingdom and Belgium. The strategic direction shifted significantly in 2015 when the company formed the Crown Hosting joint venture with the Cabinet Office, establishing a virtual monopoly on physical data centre provision for the British state.

The sellers previously attempted to monetise the asset in 2023. New Zealand-based infrastructure manager HRL Morrison & Co submitted an offer valuing the business at roughly £2.5 billion, according to Reuters. The sellers rejected that bid because it fell short of their internal valuation targets. Following that aborted process, the market environment changed as demand for artificial intelligence workloads consumed available power capacity across Western Europe. TPG identified the asset in 2026 as grid constraints in primary markets made greenfield development increasingly difficult.

The Financial Times reported on 28 October 2026 that TPG approached Elliott to bypass a competitive auction. The direct approach allowed the American investment firm to conduct detailed reviews of the Crown Hosting framework agreements before committing to a formal bid. Elliott elected to engage in these bilateral talks because the proposed $5.0 billion valuation met the return thresholds it established following the failed 2023 process.

Valuation and comparables

The $5.0 billion headline figure translates to roughly £3.8 billion. This represents a substantial increase from the £2.5 billion offer the sellers rejected in 2023, according to Reuters. It also exceeds the £3.0 billion reserve target Elliott reportedly set when it began exploring sale options in September 2025.

Ark recorded negative EBITDA of £5.0 million on £227 million of turnover for the 2023 to 2024 financial year. A traditional enterprise value to EBITDA multiple cannot be applied to these historical results. Buyers in the digital infrastructure space assess valuation through a price per megawatt metric. Ark controls more than 560 megawatts of operational and development capacity. The $5.0 billion enterprise value implies a metric of roughly $8.9 million per megawatt, assuming all development capacity receives grid connection and planning consent.

This pricing aligns with recent private market transactions for European data centre operators. BlackRock and MGX acquired Aligned Data Centers in 2026 for $40 billion, a transaction that set a high baseline for platform valuations. Synergy Research Group data published by the Financial Times on 28 October 2026 indicates that sector deal volume reached $89.4 billion in the first ten months of the year, up 50 per cent from the entirety of 2025. TPG is paying a premium for the certainty of Ark’s secured grid connections and the sovereign risk profile of its anchor tenant.

Financing and structure

TPG is funding the proposed acquisition through its dedicated real estate and infrastructure strategies. The firm has not disclosed the precise mix of equity and debt it plans to deploy. Infrastructure buyouts of this size typically utilise senior secured term loans priced against the company’s contracted revenue base. Ark’s public sector contracts provide highly visible cash flows, allowing buyers to secure more favourable debt terms than they would achieve with a pure enterprise colocation provider.

The transaction structure involves the direct purchase of 100 per cent of the equity in the target parent company. Elliott Investment Management will exit its majority holding entirely. Revcap will also sell its minority interest, providing a complete change of control. TPG will inherit the existing joint venture structure with the UK Cabinet Office, requiring the buyer to manage complex reporting lines between its investment committee and British civil servants.

Risks, conditions and key dates

• 30 September 2025: Reuters reports Elliott is exploring a sale targeting a valuation above £3.0 billion.
• 28 October 2026: The Financial Times reports TPG is in advanced bilateral talks to acquire the company for $5.0 billion.
• Late 2026 (Expected): Potential signing of a definitive sale and purchase agreement, subject to final board approvals.
• Regulatory clearance (Pending): The acquisition requires approval under the National Security and Investment Act. The UK government maintains strict oversight of the Crown Hosting infrastructure.
• Tenant retention risk: While the public sector contracts are secure, enterprise clients including IBM and Palo Alto Networks hold standard commercial leases that TPG must renew at higher market rates to justify its valuation.
• Grid delivery risk: The valuation relies heavily on the 560-megawatt pipeline. TPG must secure final power connections from a constrained national grid to realise the full value of the development assets.

Where reports disagree

Media reports present a unified view on the current $5.0 billion valuation but differ on the asset’s historical pricing expectations. The Financial Times stated on 28 October 2026 that the current discussions value the business at $5.0 billion. On 30 September 2025, Reuters reported that Elliott sought a valuation of “more than £3.0 billion ($4.0 billion)” during its initial market testing. Furthermore, reports differ on the specifics of the 2023 aborted sale process. Reuters noted that Morrison & Co bid roughly £2.5 billion ($3.0 billion), while other uncredited market reports cited a reserve target of £1.8 billion ($2.4 billion) at that time. Finally, the Financial Times describes the current $5.0 billion figure without specifying whether it represents equity or enterprise value, a distinction neither TPG nor the sellers have clarified in public statements.