Digital 9 Infrastructure (LON: DGI9), a private equity firm, today announced that it has completed its upsized £275m equity placing for new ordinary shares on the London Stock Exchange, providing it with funds to acquire digital infrastructure assets from the business’ pipeline of investment opportunities. Notably, Digital 9 Infrastructure increased the amount of equity raised from its original £200m target, to £275m, given investor demand.
Placing of Shares – Digital 9 Infrastructure (DGI9)
Overall, Digital 9 Infrastructure is issuing a total of 255.8 million new ordinary shares at a price of 107.5 pence per share, which equates to gross proceeds of £275m for its stock placing.
Use of Proceeds
Proceeds from Digital 9 Infrastructure’s equity raise will be used to acquire additional assets from the business’ near-term pipeline, comprising £670m+ of investment opportunities (see below).
Capital Structure
Following admission of the new ordinary shares, Digital 9 Infrastructure will have issued a total of 722.5 million ordinary shares. To-date, Digital 9 Infrastructure has raised gross proceeds of £750m through its IPO and subsequent incremental equity raises.
Transaction Advisors
Akur Capital, led by Tom Frost, is serving as financial advisor to Digital 9 Infrastructure. Additionally, J.P. Morgan is acting as global coordinator, and sole bookrunner to the firm for the share placing.
Digital 9 Infrastructure – Portfolio and Pipeline
To-date, Digital 9 Infrastructure has deployed £423m of equity in the digital infrastructure sub-sectors of fiber, particularly subsea cables, as well as data centers. Specifically, the firm has invested in or committed equity to Aqua Comms, subsea cable EMIC-1, and Verne Global. Therefore, Digital 9 Infrastructure fund’s cumulative £465.6m of net proceeds from its prior equity raises has been substantially invested.
Pipeline – Near-Term
Digital 9 Infrastructure’s near-term pipeline consists of £670m+ of investment opportunities, £167m of which is under exclusivity or non-competitive. For example, these near-term opportunities include six data center investments with an aggregate value of ~£188m.
In particular, Digital 9 Infrastructure is in exclusivity to acquire a metro data center based in the UK. Moreover, the firm expects to complete this acquisition by October 31, 2021, subject to due diligence.
Pipeline – Wider
Digital 9 Infrastructure has incrementally identified a 12-month pipeline of £1.85bn of opportunities (i.e., ~£2.5bn including near-term pipeline). Indeed, these investments also require further capital expenditures to execute their longer-term business plans. The firm’s breakdown of its wider £1.85bn pipeline is as follows:
- Towers and Small Cells (Wireless): two assets with an enterprise value of £365m, equivalent to 20% of its pipeline
- Data Centers: three assets with an enterprise value of £350m, equivalent to 19% of its pipeline
- Fiber (Terrestrial): two assets with an enterprise value of £625m, equivalent to 34% of its pipeline
- Subsea Cables: two assets with an enterprise value of £510m, equivalent to 27% of its pipeline
Geographically, these opportunities are primarily in the UK, the Nordics, the Middle East, North America, and Asia-Pacific. Examples of these opportunities include a UK wireless operator (i.e., Ontix) and a subsea asset operating across Australasia.
