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Strong start for Digital 9 Infrastructure as it announces another equity raise

Strong start for Digital 9 Infrastructure as it announces another equity raise – Digital 9 Infrastructure (DGI9) has completed the acquisition of Verne Holdings (or Verne Global), a data centre platform in Iceland, operating on a former NATO site near Keflavik for a valuation of approximately £231m in cash.

Verne Global is the leading Icelandic data centre platform, delivering sustainable data centre solutions in a geographically optimal environment, with 100% of power delivered from local renewable sources (hydroelectric and geothermal) and delivering exceptional energy efficiency by making use of year-round ambient low temperatures for cooling.

Free-air cooling removes the need for chillers, along with reduced infrastructure requirements and operational costs for customers, which combined with access to low cost and virtually unlimited power, enables Verne Global to provide high performance compute services at a market leading price.

This acquisition, which is one of DGI9’s pipeline investments identified at IPO, is its first data centre acquisition. The transaction represents a multiple of approximately 20x contracted, run-rate EBITDA, with a base case cash yield of 7%+. Verne Global offers significant potential to scale up existing operations and enhance value further, particularly from the existing Icelandic operations, land (40 acre campus) and on site power availability.

Thor Johnsen, head of digital infrastructure at Triple Point, said: “Data centres form a key part of the digital infrastructure backbone.  Verne Global’s existing Icelandic based data centre assets represent some of the cleanest, lowest carbon footprint data centres, globally. This is another key step to support decarbonising the data centre industry.  For society to meet key decarbonisation goals, we need to look for ways to shift energy consumptive activities to areas of surplus renewable energy. The digital infrastructure industry has an increasing energy footprint, particularly data centres, which need to become more energy efficient and green.  However, as an industry we should not rely on carbon offsets in markets which are already struggling to meet carbon targets, but we need to attract data centre demand to areas where there are robust sources of renewable power.

We are thrilled to add the Verne Global platform to the growing D9 portfolio. Together with the D9 subsea investment in Aqua Comms, we are pursuing further fibre network opportunities to improve connectivity into the Nordics, enabling data centre users reliable and low cost access to the vast renewable and low cost energy resources of Iceland and the Nordics.”

Further pipeline

DGI9 has identified a further six data centre investments with an aggregate value of approximately £200m, which form part of a broader near-term pipeline of, in aggregate, over £670m.

In particular, in July 2021 the DGI9 secured exclusivity in respect of the acquisition of a premier metro data centre based in the UK. The manager is in advanced negotiations on this acquisition, including completion of a comprehensive due diligence exercise, and it is anticipated that, if this acquisition goes ahead, it will complete by 31 October 2021.

This metro data centre acquisition is in line with DGI9’s stated strategy of acquiring data centre assets in metro or edge locations, to move computing closer to the end user, and with robust connectivity.

Interim results

Meanwhile, DGI9 also posted its results to 30 June 2021, from its admission to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange in March, when it raised gross proceeds of £300m at an issue price of 100p per share.

In June 2021, the company raised further gross proceeds of £175m via a secondary fundraise at a price of 105p per share, bringing total equity raised over the period to £475m. Since IPO, the trust’s NAV has risen by 5.47%.

DGI9 declared a dividend of 1.5p per ordinary share in respect of the period from admission on 31 March 2021 to 30 June 2021. This dividend will be paid on or around 30 September 2021 to shareholders on the register at 17 September 2021.

This is in line with the trust’s target for the period, as set out at IPO. DGI9 is targeting a annualised dividend of 6p per ordinary share, equivalent to 4.5p per share for the nine month period from IPO to 31 December 2021.

Having deployed £423.1m (including committed funds), the net proceeds of the equity raises have now been substantially invested and DGI9, therefore, intends to undertake a further equity raise in the near-term, details of which will be notified to the market in due course.

DGI9 : Strong start for Digital 9 Infrastructure as it announces another equity raise

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