A day after Infratil advised shareholders it was mulling over how best use its almost $1billion war chest, the infrastructure investment company revealed yesterday it had bought an $A392million ($NZ419.4million) stake in Australian business Canberra Data Centres.
Infratil's full-year report a day earlier had noted its $728million cash position raised the question of a capital return to shareholders, but also emphasised many investments required long lead-in times. Infratil and Australian government pension fund Commonwealth Superannuation Corp will each take a 48% stake in Canberra Data Centres (CDC), while the remaining 4% will be taken up by management, including founder and chief executive Greg Boorer, who will stay on.
CDC is owned by funds associated with Quadrant Private Equity, the founders and management.
Infratil chief executive Marko Bogoievski said CDC was well-positioned to take advantage of industry tailwinds, including continued growth in outsourcing, data storage and processing.
CDC has about "30MW" of capacity split across three facilities, and two data centre campuses, with two greenfield development opportunities under way, totalling another 27MW capacity. ‘‘We're looking forward to supporting the company in its next phase of development,'' Mr Bogoievski said in a statement yesterday.
In a separate filing with the NZX yesterday, Infratil and Commonwealth Superannuation Corp will form a 50:50 joint venture company and each will make capital contributions of up to $A420million
towards buying CDC, which includes agreed capital expenditure funding.
During the past eight years, CDC has grown to become the leading provider in Canberra of outsourced data centre services and partner to numerous federal government agencies and private sector customers.
Forsyth Barr broker Suzanne Kinnaird said CDC's current earnings before interest, tax, depreciation and amortisation was $A50million, but that was expected to increase to around $A80million for the year to June 2017, after completion in coming weeks of a new data centre being built.‘‘CDC appears to have good growth opportunities and in our view fits the type of growth infrastructure that suits Infratil,'' she said.
Infratil's war chest came from last year's sale of Z Energy, iSite and Lumo and, including debt and bonds, was valued at close to $1billion.
Regulatory approval is required from Australia's Foreign Investment Review Board, with the deal expected to be settled in July.
