)
Data centre group NEXTDC (ASX: NXT) has raised $550 million via an institutional placement for the acquisition of targeted development sites in Asia amid its stated plans to double the size of the business globally.
The Asian acquisitions will add to the company’s existing capital expenditure program in the Asian region, where development is under way for its first data centre in Kuala Lumpur and due for completion in FY26.
NEXTDC says the opportunities to grow are being driven by rising demand for cloud and artificial intelligence-led digital infrastructure, particularly in Asia.
The Brisbane-based company has previously indicated that it is evaluating several potential sites for new data centres Asia, and it has already locked in projects for Bangkok in Thailand and Johor in Malaysia. The company also has one new centre in the planning stage and another under evaluation in Tokyo.
The company received foreign investment approval in FY24 from Thailand’s Board of Investment (BOI) for the development of a new “hyperscale data centre” in Bangkok. This approval allows the company to advance the planning and development of a new data centre in Bangkok once a suitable site has been acquired.
Through the capital raise, NEXTDC shares have been issued at $17.15 each, a 3.9 per cent discount to yesterday’s close of $17.84, with the placement “strongly supported” by existing shareholders and new investors.
The raise price is still substantially higher than the $16.07 level of NXT securities prior to the announcement of Blackstone's majority acquisition of another Australia-based, global data centre group AirTrunk at an enterprise value of $24 billion.
The Blackstone deal with AirTrunk, which was incidentally founded by a founding board member at NEXTDC, sent several data centre-related stocks surging including NXT shares.
“The strong support for this placement highlights continued investor confidence in NEXTDC’s growth strategy and long-term vision,” says NEXTDC’s CEO Craig Scroggie.
“As AI (artificial intelligence) continues to drive unprecedented demand for accelerated computing, the need for scalable, high-performance digital infrastructure has never been more vital.
“This successful placement ensures that NEXTDC is well-positioned to meet the growing needs of the cloud and AI ecosystems, while seizing new opportunities in a rapidly evolving market.
“Our focus remains on maintaining the agility and innovation required to power the next generation of AI-driven technologies that help enterprises harness the digital age.”
NEXTDC announced plans for the share placement after the market closed yesterday and issued a statement today declaring the successful closure of the raising.
The company’s existing pipeline of developments are ultimately targeted to boost NEXTDC’s portfolio to more than 1GW of power which compares with current built capacity of 165.1MW.
Australia will account for most of this targeted power, with NSW and ACT centres alone totalling 504.3MW, while international sites, including a new data centre for Auckland, are currently expected to deliver 80MW.
NEXTDC has already spent more than $2.5 billion developing its current portfolio of 26 data centres either completed, under development or in planning since inception.
“The underlying market dynamics that continue to drive demand for NEXTDC’s leading digital infrastructure platform continue at an unprecedented pace,” says Scroggie.
“While the company is already well placed from a liquidity perspective to continue to accelerate its development activities, it is becoming clear that opportunities for value accretive investment in the near term will continue to grow in accordance with our record pipeline and strong growth in the demand for cloud and AI services.
“We're thrilled the Thailand BOI approved our investment application for a new NEXTDC hyperscale data centre in Bangkok.
“In addition to our ongoing development and expansion in Malaysia, this capital raising will support another significant step in NEXTDC’s expansion efforts in Southeast Asia and underscores our commitment to delivering world-class Tier IV and built-to-suit data centre solutions across the region.”
NEXTDC's growth plans align with heightened investments in the sector globally, led by $24 billion acquisition of Australian data centre group AirTrunk by global alternative asset manager Blackstone.
Enjoyed this article?
Don't miss out on the knowledge and insights to be gained from our daily news and features.
Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.
Support independent journalism and stay informed with stories that matter to you.
)
)
)
)
)
