Megaport (ASX: MP1) has hired Royal Bank of Canada and Morgans to help it raise $60 million to upgrade Megaport's network capacity and accelerate its expansion into new locations and markets.
The cloud network provider will raise $50 million in new equity via a placement to institutions and sophisticated investors and up to $10 million via a share purchase plan.
Bevan Slattery's Megaport says the money will also be used to "consolidate its first mover advantage" and fund staffing, marketing and operating costs and general working capital requirements.
Megaport will issue ordinary shares under the placement at $3.75 per share which will raise approximately $50 million. The issue price is a 7.4 per cent discount on the closing price on March 19 of $4.05, the last trading day before the announcement.
The Brisbane-based company says it has strong interest from US institutional investors and has commitments from three cornerstone investors to subscribe for the full placement.
"Given their deep experience, they explicitly understand that our ability to invest in our competitive advantage - developing new innovative services while we continue to grow our ecosystem of service providers - will make connectivity even easier for the broad set of the digital supply chain," says Megaport CEO Vincent English.
"Enabling our Software Designed Network in more markets that are currently underserved by cloud connectivity is critical to maximising our first-mover advantage."
The cloud services provider, which uses Software Defined Networking, allows its customers to access a global platform to connect to their data base through the Megaport platform.
Founded by Bevan Slattery in 2013, the company is pinning its growth on the rapid demand from companies to be connected to the 'cloud' from anywhere in the world.
Business News Australia
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