Meta Platforms and funds managed by Blue Owl Capital enter into join venture

Meta Platforms (META) and funds managed by Blue Owl Capital (OWL) entered into a joint venture agreement which will develop and own the Hyperion data center campus. Meta will provide construction management and property management services for the project. Blue Owl Capital complements this joint venture with its ability to deliver substantial capital at scale, along with deep expertise in digital infrastructure investment-enabling the rapid execution of mission-critical data center projects for hyperscalers. Funds managed by Blue Owl Capital will own an 80% interest in the joint venture, while Meta will retain the remaining 20% ownership. The parties have committed to fund their respective pro rata share of the approximately $27B in total development costs for the buildings and long-lived power, cooling, and connectivity infrastructure at the campus. In connection with the creation of the joint venture, Meta contributed certain land and construction-in-progress assets relating to the campus development which were previously classified as held-for-sale. The funds managed by Blue Owl Capital made a cash contribution of approximately $7B to the joint venture, and Meta received a one-time distribution from the joint venture in the amount of approximately $3B. A portion of capital raised by Blue Owl will be funded by debt issued to PIMCO and select other bond investors through a private securities offering. Morgan Stanley & Co. served as exclusive financial advisor to Meta in connection with this transaction and served as sole bookrunner in connection with the private securities offering. Latham & Wakins served as legal counsel to Meta on the transaction and Eversheds Sutherland advised Meta on leasing matters. Arthur D. Little acted as commercial due diligence advisor to Meta. Marsh provided Meta project risk analysis and insurance services. Arup provided technical and environmental independent engineer services to Meta. Kirkland & Ellis served as legal counsel to the Blue Owl Capital funds on the transaction. Milbank served as legal counsel to Morgan Stanley on the securities offering.