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Internet of Things (IoT) investment company Global Data Centre Group (ASX: GDC) has hit the jackpot thanks to its holding in AirTrunk after a deal was struck last week for a sale to Blackstone at an enterprise value of $24 billion.
GDC initially invested $37 million in AirTrunk as part of a consortium led by Macquarie Asset Management (MAM) that took an 88 per cent stake in the data centre infrastructure scale-up in 2020.
As recently as 27 August this year, GDC announced the valuation of its shares in AirTrunk had been upsized by $24.1 million to $73.4 million, meaning the value of its investment had already almost doubled.
But today the group revealed that its proceeds from the Blackstone transaction were expected to be $123 million, representing more than a 3x return on investment in just a few years.
The investments of GDC, formerly known as 360 Capital Digital Infrastructure Investment Fund until a name change in early 2021, are managed by Lanrik Partners, a wholly owned entity of former AAPT CEO David Yuile.
GDC's largest investors include MA Financial Group (ASX: MAF), Samuel Terry Asset Management, Wilson Asset Management Group, Tribeca Investment Partners, Sandon Capital, Investors Mutual, Australian Retirement Trust, and Harvest Lane Asset Management.
The group is on track to converting the majority of its assets into cash returns for investors. Last week GDC confirmed net proceeds of $175.6 million would be received for the sale of French data centre group Etix Everywhere, which was slightly above the $174.6 million forecast in August.
The divestment of Etix Everywhere, combined with the sale of the Malaga data centre in Perth for $39 million, were expected to culminate in available proceeds of $1.80-$2 per GDC share which the group plans to distribute in this December half.
The expected return of $123 million equates to a potential cash injection of a further $1.59 per GDC security. Combined, even at their lowest expected level, these divestments are worth more than the $3.28 level of GDC shares this morning, which are down 6.55 per cent.
"GDC intends to distribute the proceeds available from the (AirTrunk) transaction to securityholders after closing," the company says today in an ASX release.
"No decision has been made as to the future operations of GDC following the distribution of proceeds available from the transaction and from the sale of its other assets, Etix Everywhere and Perth Data Centre."
Divestments have also helped GDC pay down much of its debt, with borrowings reduced from $73.4 million at the end of FY23 to $9.965 million by 30 June 2024.
GDC is not the only ASX-listed company to benefit from the Blackstone deal for AirTrunk, as others in the data centre industry saw a bump in investor interest by proxy.
NEXTDC (ASX: NXT) shares rose 8.4 per cent on Thursday to $17.42, while New Zealand-headquartered Infratil (ASX: IFT) didn't quite see a surge on the day of the official announcement but its shares are up 5.2 per cent since then to $11.16.
This AirTrunk effect was not seen for another data centre company, Macquarie Technology Group (ASX: MAQ), with its shares down slightly since last Thursday. Shares in Centuria Capital (ASX: CNI), which recently announced it would acquire a 50 per cent stake in new-generation data server provider ResetData for $21 million, have also remained fairly flat.
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