Megaport to raise $62m for network expansion

Written on the 5 December 2019 by Matt Ogg

Megaport to raise $62m for network expansion

Fast-rising cloud technology company Megaport (ASX: MP1) has announced a $62 million capital raise to boost its funding arsenal for accelerating expansion into new markets.

The Brisbane-based company, which provides interconnection services between cloud networks, will also use the funds for capacity upgrades, working capital requirements, operating costs, and the innovation and development of new technology.

Megaport is in a trading halt until the placement is completed with shares offered at $8.70 each, representing a 4.8 per cent discount to the previous close.

The announcement follows a record revenue result of $35.1 million in FY19, although Megaport reported a net loss of $33.6 million. The MP1 share price has risen by around 157 per cent in the last 12 months.

Led by CEO Vincent English and founded by industry expert and entrepreneur Bevan Slattery, Megaport shot through the ranks of this year's Brisbane Top Companies List to reach 19th place, up from #49 in 2018. 

During FY19 Megaport extended its reach to 20 countries with 528 enabled data centres, while the company had 300 total installed data centres at the end of the year, up by 79 from FY18.

In its quarterly update for the three months to 30 September, Megaport had a cash balance of $69 million and had projected $25.9 million in cash outflows for the current quarter. 

Macquarie breaks ground on $80 million data centre investment

In other cloud-related news, Macquarie Telecom Group (ASX: MAQ) subsidiary Macquarie Data Centres has announced it broke ground today on its new 43-megawatt (MW) $80 million data centre in Sydney.

The Intellicentre 3 (IC3) data centre will be built in the the Macquarie Park Innovation District and is targeted at hyperscalers, major SaaS providers and global enterprises.

"This facility will leverage our experience, industry-leading customer service and security credentials which are already trusted by 42 per cent of Australian Federal Government agencies," said Macquarie Data Centres group executive David Hirst.

"Sovereignty, cyber security and compliance standards are more vital than ever to protect the data and infrastructure of businesses in Australia. Our 18-year data centre experience and security posture make IC3 an ideal inroad for US and other multinational companies to enter the thriving Australian market.

IC3 is expected to create approximately 1,200 jobs in construction, engineering and architecture and require around 400,000 working hours to complete.

FDC will complete the construction using 250,000 kilometres cable to be built into the facility. When complete, it will be able to power the equivalent of 12,500 homes.

"FDC is proud to partner again with Macquarie Data Centres on its IC3 facility in Macquarie Park," says FDC Construction managing director Ben Cottle.

"As our fourth project together, we look forward to being part of Macquarie Data Centre's growth and success strategy going forward."

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Author: Matt Ogg

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