MEGAPORT TARGETS GLOBAL EXPANSION WITH $27.8M CAPITAL RAISING
Written on the 28 June 2017 by David Simmons
MEGAPORT Limited (ASX: MP1) will complete a $27.8 million capital raising to assist in expanding the group's platform internationally.
The Brisbane based connectivity company will use the injection of capital to fund North American and European network-related capital expenditures, operating costs, and to develop new products.
Megaport business partner Digital Realty will purchase via private placement 5.4 million ordinary shares on behalf of a consortium of US-based investors to raise $11.4 million.
The capital raising includes a fully underwritten institutional placement in Australia to raise additional funds of $16.4 million.
Under the capital raising the Brisbane company will issue 13.2 million shares at $2.10 per share. The issue price represents a 6.7 per cent discount to yesterday's closing price.
Megaport Chief Executive Officer Vincent English says the capital raising is vital for the company's expansion plans.
"The capital raising will enable Megaport to continue extending our network to new locations around the world and is critical to maintaining our first-mover advantage," says English.
"We are very pleased Digital Realty has taken a cornerstone position in the strategic placement and we look forward to further expanding our presence across the global platform and serving our joint customers' cloud connectivity needs around the world."
Digital Realty chief technology officer Chris Sharp says his company's support of Megaport will benefit Digital Realty's customers too.
"Enabling our customers with a rich ecosystem of service providers is a top priority," says Sharp.
"As our customers transform their IT architecture, Digital Realty is committed to providing interconnection services and capabilities that anticipate and fulfil and on-demand consumption model. Megaport helps us provide the advanced interconnection solutions that give our customers a competitive edge."
"We look forward to continuing to work with the Megaport team and are pleased to support their continued growth."
This latest round of capital raising follows Megaport's expansion into China in May this year.
The Brisbane company entered into a partnership with Chinese tech giant Alibaba to provide its customers with direct access to Alibaba Cloud, a high speed and secure network connection.
Megaport also recently completed a key international infrastructure project by establishing a Sydney to Los Angeles link to cater for growing demand for its services.
Author: David Simmons