HMC Capital is raising $300m to buy Australian data centres from Global Switch for $1.93bn.
Four investment banks have been hired for the deal, including Goldman Sachs, UBS, JPMorgan and Macquarie Capital .
The company announced plans on Thursday to list the DigiCo Infrastructure REIT which would be controlled by HMC Capital alongside a new institutional unlisted fund.
HMC Capital said in a statement it had other assets secured or under exclusive due diligence.
It had identified seed assets, predominantly based in the United States, which were under exclusive due diligence.
The raise, a fully underwritten institutional placement, is at an issue price of $8.75 a share, a 5 per cent discount to the last traded price of $9.21, and HMC said after the raise, it will have about $3bn of balance sheet underwriting capacity to support the acquisition and establishment of DigiCo REIT.
Chief executive David Di Pilla has previously made known his plans for a listing of a digital infrastructure fund, and the hope is for it to happen by Christmas.
HMC Capital told the market on August 21 that it had established new growth platforms, including private credit, energy transition and digital infrastructure.
Its digital infrastructure platform was established with the acquisition of North American business StrapCap and has $700m of assets under management.
The sector is forecast to need $US1 trillion of capital spending by 2028 with the growing usage demands from artificial intelligence.
Global Switch Australia has been up for sale through investment bank UBS.
On offer have been two major data centres on the western edge of Sydney’s central business district comprising 73,000 sqm of space, owned by Global Switch.
They have 86 customers with an average lease length of 3.4 years.
Demand for data centres, which are needed to power AI, is strong after Blackstone paid $24bn for industry giant AirTrunk.
HMC Capital’s medium-term target was to have about $2bn of assets under management in digital infrastructure and its overall target of having $20bn of assets under management – almost doubling from its current level of $12.7bn.
HMC Capital was launched and floated with the former Masters Hardware properties sold by Woolworths before branching out with a listed healthcare real estate fund and daily needs fund.
It embarked on a $2.5bn merger with bulky goods operator Aventus, purchased $1.2bn of hospital properties operated by Healthscope and has made other acquisitions in renewable energy and real estate.
DataRoom reported in 2021 Global Switch was working with investment banks Morgan Stanley and UBS for the sale of 49 per cent of the business after the company made efforts in 2019 to launch an initial public offering for the business in Hong Kong.
At that time, the talk was its Australian assets could come up for sale as it explored investment options.
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