Background: Yesterday, 3i Infrastructure (3iN) announced that it had agreed to invest $512m (c.£380m at current FX rates) to acquire a 100% stake in Global Cloud Xchange (GCX). GCX is a leading global data communications service provider and owns one of the world's largest private subsea fibre optic networks (see overleaf). Completion is conditional upon certain regulatory approvals and is expected in mid-2022. Investec view: We think this is an interesting investment into a sector with strong underlying growth drivers. Global data traffic is increasing rapidly, with management expecting data usage to grow in excess of 25% per annum. The transfer of data relies on data carrier infrastructure such as GCX’s extensive network in order to move data between hubs across the globe. 3iN already has made significant investments into digital infrastructure in recent years, having acquired 50% of Tampnet in 2019, and earlier this year the company acquired a 60% stake in DNS:NET. Tampnet provides data connectivity in the North Sea and the Gulf of Mexico through a comprehensive network of fibre optic cables, 4G base stations and microwave links. DNS:NET is an independent telecommunications provider in Germany. On a pro-forma basis, following completion of the acquisition, GCX will be 3iN’s largest investment at c.14.6% of NAV. In our recent note following the interim results (here), we estimated 3iN’s cash balance to be c.£362m and therefore this investment effectively fully deploys all available cash, although we note that completion of the deal is not expected until mid-2022. The company has a strong pipeline of potential investment opportunities and, importantly, has access to a £400m RCF, with a £200m accordion facility. 3iN also outlined that it is considering the sale of ESVAGT, valued at £226m (8.7% of NAV). Management has outlined that GCX will provide an attractive yield to the company. Whilst 3iN do not disclose discount rates for individual assets, we expect this investment to be accretive to portfolio returns and the discount rate to be in excess of the weighted average portfolio discount rate of 10.8%. We remain comfortable with our Buy recommendation.