HMC Capital Expands into Data Centre Sector with Global Switch Acquisition

October 24, 2024 01:38 PM AEDT | By Team Kalkine Media

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HMC Capital Expands into Data Centre Sector with Global Switch Acquisition — Image source: shutterstock

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Highlights

HMC Capital announces acquisition of Global Switch Australia.

The A$1.94 billion deal strengthens its digital infrastructure strategy.

Plans include creating a digital platform and potentially listing assets.

HMC Capital Ltd (ASX:HMC) has revealed plans to acquire Global Switch Australia for A$1.94 billion (US$1.29 billion), marking a significant move into the booming data centre industry. This acquisition forms part of HMC’s broader strategy to establish a solid presence in the infrastructure sector, with plans to list its assets on the market in the near future.

The acquisition comes as demand for data centres surges, driven by the rapid growth of artificial intelligence and the increasing reliance on digital infrastructure. HMC Capital’s focus on this sector aligns with global trends, as companies look to capitalise on the opportunities created by AI and related technologies. The company intends to raise A$300 million through a share issuance at A$8.75 per share to support the funding of this deal, with the offer price reflecting a 5% discount compared to Global Switch's recent stock price.

Global Switch Australia, which faced scrutiny a few years ago due to data security concerns in Sydney, is now seen as a valuable asset in HMC Capital’s portfolio. With AI technology becoming more integrated into business operations worldwide, data centres have become critical components of the digital economy. The acquisition also comes on the heels of a major transaction in the sector—the A$24 billion purchase of AirTrunk by a consortium led by Blackstone, highlighting the intense competition in the space.

HMC Capital aims to establish a global digital infrastructure platform, integrating Global Switch’s operations. This platform will be housed within a newly formed institutional unlisted fund managed by HMC. Additionally, the company has hinted at the possibility of launching a data centre real estate investment trust (REIT) in the future, further solidifying its ambitions in the infrastructure space.

This acquisition is part of HMC’s broader strategy, which includes its earlier purchase of the US-based digital infrastructure asset manager StratCap. The move positions HMC Capital as a key player in the rapidly evolving digital infrastructure landscape, as it leverages increasing demand for data-driven solutions.

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