NextDC (ASX:NXT) upgrades its guidance and unveils a $618m capital raising

NextDC (ASX:NXT), the ASX’s biggest data centre operator that was funded by Bevan Slattery, is undertaking its first capital raising in 3 years. The proceeds will help fund development of 2 new data centres in Malaysia and New Zealand.

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NXT setting itself up for the future

NextDC was founded in 2010 and has a portfolio of 17 data centres around Australia. Data centres are buildings hosting applications that store and share application and data. If you’ve used technology of any kind (whether computers or even mobile phones), you’ve likely been assisted by a data centre without even knowing it.

The company was in a good space during the pandemic due to the rise in remote working, but the company is betting that the trend is not slowing down.

NextDC bought land in Auckland just a couple of months ago although it only revealed its intention to build a data centre there last week. With the $618m capital raising, it hopes to develop that site as well as its holding in Kuala Lumpur. It plans for both site to be operational in the second half of CY25. NextDC also has plans for a Tokyo site but has left it unmentioned in this morning’s announcement.

The deal leaves the company with A$2.6bn in pro-forma liquidity (including A$1.5bn in debt) and a pro-forma tangible asset backing of A$3.8bn. It is priced at A$10.80 per share, a 7.5% discount to its TERP (Theoretical Ex-Rights Price) price, essentially the price the company thinks it should trade at following the ex-date of the capital raising. Nonetheless, it is hefty premium to its IPO price – $1 per share!

Upgrading guidance

Given shareholder resentment about dilution at the last capital raising, there had to be further news this morning.

And the company updated its FY23 guidance. After forecasting A$340-$355m in revenue, it now expects $350-$360m. EBITDA was expected to be A$190-$198m but this was narrowed to A$192-$196m.

With the land acquisitions, its capital expenditure guidance was upgraded too – from A$620-$670m to $670-$720m.

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