NextDC has played the capital markets game superbly to be on the cusp of the top-50 stocks. To stay there, it has to deliver.
Already a subscriber?Data centre owner NextDC has hit the big leagues – its first $1 billion-plus equity raising that should help catapult it into Australia’s top-50 listed companies.
So, blessed with a share price up 52 per cent in the past year and an earnings multiple that has exploded to 44 times, it is capitalising on that support and raising $1.32 billion in growth capital – nearly double its previous biggest deal.While NextDC still needs to spend its $1.32 billion wisely, this is what we want to see from ASX-listed companies.
It is a story about potential – you have to look a few years out to make any sense of its eye-watering 44 times forward EBITDA multiple – and of the growing use of data, cloud services and demand for data centres. Plenty could still go wrong. Its $1.32 billion raising was targeted at existing investors; a one-for-six accelerated renounceable rights issue, which offers all shareholders the chance to buy discounted stock or be compensated for the dilution. At $15.40 a share, it was a 6.8 per cent discount to the theoretical ex-rights price, and a 7.8 per cent discount to the last close.
The deal is only possible because NextDC has performed well for shareholders. Investors are up 23.2 per cent a year in the past five years , while the S&P/ASX 200 returned 10.3 per cent on the same basis. That keeps NextDC’s valuation up, and makes it too expensive for private capital.
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