Brookfield-Backed Data Center Firm Goes Public

Brookfield-backed data center services provider CSquare is coming out of the shadows as the company goes public.

The Dallas-based firm is looking to raise as much as $1.35 billion in an initial public offering, Bloomberg reported. It’s seeking to sell 50 million shares priced between $23 and $27 each, according to a filing with the Securities and Exchange Commission.

At the high end of that range, the market valuation of the company would be $4.18 billion. Proceeds from the IPO will pay off the $734 million outstanding debt on a revolving credit facility, along with a $75 million promissory note held by Brookfield and part of a $4.3 billion debt of asset-backed notes.

Brookfield is expected to hold on to voting control after the offering concludes. Led by a plethora of banks, CSquare is likely to trade on the New York Stock Exchange under the CSQR symbol.

In April, CSquare announced the submission of a draft registration statement, a critical step in a confidential initial public offering process, which can allow engagement with regulators and the SEC to take place in private.

In the first quarter, CSquare posted a revenue of $270.5 million and a net loss of $66 million, an increase in both figures from the year prior. The company generates much of its revenue through colocation and interconnection services.

Since launching in 2019, CSquare has built an ownership or operation portfolio of more than 60 data centers across the United States, Canada and the United Kingdom. CSquare was formed last year after Brookfield Infrastructure Partners bought Cyxtera Technologies for $775 million and merged it with Evoque Data Center Solutions.

In October, CSquare was reported to be embarking on a $1 billion spending spree to purchase 10 properties across the U.S. and Canada as AI and cloud computing fuel demand. The deal included several colocation centers in Dallas, Nashville and Toronto, plus two sites in Boston and Minneapolis that the company had previously operated under long-term leases.

The AI and data center IPO space is getting crowded. In May, Blackstone Digital Infrastructure Trust filed for an initial public offering, projecting to raise approximately $1.75 billion by issuing over 87 million shares at $20 each.

The IPO was intended to fund acquisitions of new construction data centers, valued between $250 million and $1.5 billion, and utilized by hyperscalers.

— Holden Walter-Warner