Megaport to raise $60m to fund aggressive expansion

Megaport to raise $60m to fund aggressive expansion

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.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

Mandatory COVID isolation to end nationally mid-October

Mandatory COVID isolation to end nationally mid-October

National Cabinet has today determined that mandatory isolation peri...

Bottoms up: Sydney cold brew coffee liqueur brand Mr Black acquired by beverage giant Diageo

Bottoms up: Sydney cold brew coffee liqueur brand Mr Black acquired by beverage giant Diageo

Fast-growing coffee liqueur brand Mr Black is joining a portfo...

Sunset on the horizon in 2023 for developer Sunland

Sunset on the horizon in 2023 for developer Sunland

A developer behind some of the Gold Coast's most iconic buildin...

Tritium teams up with JET Charge to create world’s longest EV highway in WA

Tritium teams up with JET Charge to create world’s longest EV highway in WA

Brisbane-based electric vehicle charger group Tritium DCFC (NASDAQ:...