SYDNEY: HMC Capital Limited (ASX: HMC) has announced an agreement to acquire iseek, an Australian co-location data centre platform, for $400 million. This acquisition aligns with HMC’s plan to create a Global Digital Infrastructure Platform, known as DigiCo.
HMC has secured $2.5 billion in strategic assets in Australia and is conducting due diligence on an additional $1.6 billion in data centre assets in North America. These acquisitions will support the launch of an ASX-listed DigiCo Infrastructure REIT (DigiCo REIT) with over $4 billion in assets under management (AUM).
Key Details:
- Acquisition of iseek: The $400 million acquisition includes $150 million in cash and $250 million in shares of DigiCo REIT, with major shareholders and founders agreeing to hold most of their shares until after the FY25 and FY26 results.
- Facilities: iseek has 6MW of installed IT capacity across seven locations in Queensland, South Australia, and New South Wales, with plans for a 27.6MW expansion.
- Customer Base: iseek serves over 500 customers, including government, enterprise, and hyperscale tenants.
DigiCo REIT:
- Launch: HMC plans to establish the DigiCo REIT by the end of the year, raising approximately $2.6 billion in new equity.
- Portfolio: DigiCo REIT will own, operate, and develop data centres globally, aiming for strong returns driven by revenue growth, leasing, and development opportunities.
- Capacity and Growth: The REIT will start with 76MW of installed IT capacity and a pipeline for over 161MW of planned IT capacity across Australia and North America, targeting a 10%+ yield on cost.
HMC has raised $300 million in equity and increased its corporate credit facility by $150 million, ensuring the necessary funds for the acquisition of the DigiCo seed assets. If the DigiCo REIT IPO is delayed, HMC can defer the settlement of the iseek acquisition until March 31, 2025, and may also defer or cancel the US acquisitions.
HMC Managing Director and CEO, David Di Pilla, said, “iseek is a leading colocation data centre platform with a high quality and diverse customer base across government, hyperscale and enterprise customers.
This acquisition is also highly complementary to our recent acquisition of Global Switch Australia with a number of benefits including enhanced geographic and customer diversification.
The DigiCo platform will have over 100 dedicated people across iseek, Global Switch Australia and StratCap, and represents the beginning of our strategy to build a world-class operating platform providing investors with exposure to institutional grade digital infrastructure assets in both Australia and North America.”
iseek Chief Executive Officer, Scott Hicks, and Founder & Executive Director, Jason Gomersall, said, “We are excited to be partnering with HMC Capital’s DigiCo platform to accelerate iseek’s next phase of growth. A significant portion of the acquisition proceeds will be taken in scrip in the DigiCo Infrastructure REIT IPO which is a testament to our strong conviction in the REIT’s investment strategy and growth runway.”
HMC Capital acquires StratCap for $28.5 million in cash and shares