Digital 9 Infrastructure today announced the launch of a £100m placing of new ordinary shares to acquire assets, beyond Aqua Comms, from the company’s pipeline of investment opportunities at initial public offering (IPO), such as data centers and wireless infrastructure provider Ontix. Specifically, the £100m of gross proceeds will be offered at a price of 105 pence per ordinary share. Indeed, this represents a 5% premium to Digital 9 Infrastructure’s IPO price and a 7% discount to the company’s closing mid-market price on May 21, 2021.
Akur Capital is serving as financial advisor, while J.P. Morgan is acting as global coordinator, and sole bookrunner to Digital 9 Infrastructure for the share placing. Finally, Digital 9 Infrastructure’s new ordinary shares are expected to be admitted and begin trading by June 10, 2021.
Pipeline – Digital 9 Infrastructure
Triple Point Investment Management, Digital 9 Infrastructure’s investment manager, has identified £600m of investment opportunities capable of completion in the next 12 months. Specifically, Digital 9 Infrastructure’s pipeline includes U.S., UK and Nordic data centers, UK terrestrial fiber platforms, and a UK wireless infrastructure business, Ontix.
Short-Term Pipeline – £200m of Opportunities
Digital 9 Infrastructure states that it has £200m of opportunities which are in a combination of i) active discussions, ii) through initial investment committee review, and/or iii) in exclusivity. Indeed, these transactions are capable of completion within the next three months.
Below are specific examples of assets that Digital 9 Infrastructure could acquire from its pipeline:
Data Centers – Opportunity #1
Triple Point has been in negotiations with eight data center targets in the U.S., UK, and Nordics. In aggregate, the potential opportunities represent ~8.6k cabinets of power capacity and, following expansion, 276 megawatts of power capacity. Overall, these opportunities comprise 473k sqft (44.0k sqm) of area. Below are the precise characteristics of each individual data center opportunity:
Ontix – Opportunity #2
Ontix Infrastructure is a provider of wireless infrastructure neutral host solutions, including small cells, Wi-Fi, fixed wireless access (FWA), indoor wireless, and fiber backhaul. The company owns and operates this shared infrastructure and licenses it to customers such as wireless carriers.
Overall, Ontix has 200+ access points under contract and exclusive long-term access to street infrastructure in the City of Westminster and Bexley.
Notably, Thor Johnsen, Head of Digital Infrastructure at Triple Point, holds a 15% indirect interest in the share capital and sits on the board of directors of Ontix Infrastructure. Additionally, Nigel Bayliff, Chief Executive Officer of Aqua Comms (see below), sits on the board of directors of Ontix Infrastructure.
Medium-Term Pipeline – £400m of Opportunities
Beyond its short-term pipeline, Digital 9 Infrastructure notes that it has £400m of opportunities which have a completion timeframe of 3 to 12 months.
Long-Term Pipeline – £2bn of Opportunities
Finally, Digital 9 Infrastructure, with Triple Point’s support, has identified £2.0bn in development and operational investment opportunities.
Deployment of IPO Proceeds
Digital 9 Infrastructure raised gross proceeds of £300m through its IPO on March 31, 2021. Subsequently, on April 1, 2021, Digital 9 Infrastructure completed the acquisition of Aqua Comms at a valuation of $215m (£160m). Aqua Comms is a subsea cable owner and operator with 8.9k route miles (14.3k route kilometers) of network.
Aqua Comms – Operational Update
Following Digital 9 Infrastructure’s acquisition of Aqua Comms, the company made its largest ever single sale of fiber capacity. Specifically, Aqua Comms sold long-term lease rights to 8 fiber pairs, on one system, to an existing content provider customer.
PrimaryBid Offering – Digital 9 Infrastructure
Separately, Digital 9 Infrastructure announced that it is raising up to €8m from private investors through the PrimaryBid Offer system.