HMC Capital's major strategic move

HMC Capital (ASX:HMC) has revealed plans to establish a new global digital infrastructure platform with the acquisition of Global Switch Australia for $1.937 billion. The initiative includes a $300 million equity raising to support this strategic move.

Overview of HMC's acquisition and equity raising

HMC Capital's latest announcement marks a significant strategic development with the acquisition of Global Switch Australia, a 26MW data center in Sydney. This acquisition serves as a seed asset for the newly formed Global DigiCo Platform, which includes both a planned ASX-listed DigiCo REIT and a new unlisted institutional fund. To facilitate this acquisition, HMC is conducting a $300 million fully underwritten institutional placement, issuing approximately 34 million new shares. The initiative is part of HMC's broader strategy to strengthen its balance sheet and enhance capital recycling, aiming for a group-wide return on equity of over 20%. The company is committed to expanding its digital infrastructure footprint, with additional assets currently under exclusive due diligence, primarily in the United States. HMC's financial outlook for FY25 includes an operating EPS forecast of 46 cents and a DPS guidance of 12 cents. The company continues to target significant growth in its funds under management, aspiring to exceed $20 billion in the medium term.

Executive insights on HMC's strategic initiative

This acquisition will allow us to seed a world-class digital infrastructure platform and provide a strong foundation for future growth. Our strategy is focused on capturing opportunities in the digital infrastructure space and delivering high returns for our investors. We are excited to bring together a global management team with extensive experience in the sector to lead this initiative.