HMC Capital Ltd (ASX:HMC) this week announced plans to acquire Global Switch Australia for A$1.94 billion (US$1.29 billion), as the company moves to strengthen its presence in the rapidly expanding data centre sector.
The acquisition will anchor a broader real estate strategy, with the assets forming the foundation for a platform that HMC, which was founded by David Di Pilla, intends to publicly list.
To fund the acquisition, HMC Capital will raise A$300 million through a share issuance at A$8.75 per share. The offer price reflects a 5% discount compared to Global Switch's most recent closing price.
Increased demand for data centres
The acquisition follows increased demand for data centres, particularly driven by the rise of artificial intelligence. HMC Capital said it aimed to capitalise on this trend with infrastructure-focused investments.
The company’s deal comes after a recent acquisition of AirTrunk by a Blackstone-led consortium for more than A$24 billion, underscoring the growing competition in the data centre industry.
Four years ago, Global Switch Australia faced a ban from government agencies over data security concerns, which affected its Sydney-based developments.
"Data centres are very much a ‘hot ticket item’ with the AI hype-train showing no signs of slowing down, and as such companies like HMC are keen to gain a foothold in this area," said KCM Trade market analyst Tim Waterert.
The asset manager announced plans to create a global digital infrastructure platform, incorporating the data centre operator alongside a newly established institutional unlisted fund, which will be managed by HMC.
Following its acquisition of the US-based digital infrastructure asset manager StratCap last year, the company also revealed it is considering launching a data centre real estate investment trust (REIT).