Brookfield Infrastructure Partners and DigitalBridge Group are in race to buy Compass Datacenters in a deal valued at over $5.5bn, reported Reuters, citing sources.

According to the sources, Brookfield and DigitalBridge are leading competing bidding groups in the auction for the privately held Compass.

A decision on the deal, which includes Compass’ debt, is anticipated before the end of the month.

Under the terms, Compass’ debt can be assumed by a new owner without having to be refinanced, one of the sources said.

This is expected to make the acquisition easier to close at a time when market instability and high-interest rates have made debt for leveraged buyouts more difficult to come by and more expensive.

DigitalBridge, Compass Datacenters, and Brookfield Infrastructure Partners all declined the request seeking comment, reported the news agency

Based in Dallas, Texas, Compass provides access to customised data centres to hyperscale, cloud and enterprise customers.

As per the report, in recent years, the data centre industry has witnessed increased deal-making activity due to the sector’s expansion, which is driven by the rapid adoption of cloud computing.

Recently, US-based CoreWeave raised $441m in funding, with plans to set up new data centres this year to support the artificial intelligence industry.

With $161bn in assets, Brookfield claims to have 50 data centres in its portfolio.

This April, Brookfield acquired a majority stake in Data4, valuing the data centre operator at nearly €3.5bn ($3.8bn) including debt.

Based in Boca Raton, Florida DigitalBridge invests in digital infrastructure and oversees assets worth close to $69bn.