Brookfield-Backed CSquare Raises More than $1B in IPO

CSquare, a data center firm backed by Brookfield, raised $1.05 billion in an initial public offering, $300 million below its marketed price.

The Dallas-based investor sold 50 million shares for $21 each, according to a statement Wednesday confirming an earlier Bloomberg News report. The shares were marketed from $23 to $27 each.

The pricing pegs the market value of CSquare at about $3.25 billion, based on the number of outstanding shares listed in its filings.

CSquare had earlier hoped that, by going public, it could raise $1.35 billion in the IPO, with a market value of nearly $4.2 billion.

CSquare, once known as CenterSquare, owns and operates more than 60 data center sites in the U.S., Canada and the United Kingdom. The firm was formed last year after Brookfield Infrastructure Partners bought Cyxtera Technologies for $775 million and merged it with Evoque Data Center Solutions.

The company intends to use its IPO bonanza to repay its revolving credit facility, which had $771 million outstanding at the end of last month, plus a $75 million promissory note held by Brookfield.

Brookfield is expected to maintain voting control over CSquare after the public offering, according to a filing before the IPO.

In the three-month period ended March 31, CSquare had a net loss of $66 million, along with revenue of $270.5 million. During the same period last year, it had a net loss of $34.9 million on revenue of $232.8 million.

Most of the company’s revenue is generated from recurring colocation and interconnection services, with contracts ranging from one to seven years, according to Bloomberg.

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.

Its IPO comes as Wall Street homes in on all things related to artificial intelligence, especially AI infrastructure.

It also comes in the wake of SK Hynix’s $26.5 billion U.S. listing last week, and AI chipmaker Cerebras Systems, whose May listing raised $6.38 billion. Also in May, Blackstone’s data-center acquisition vehicle raised $2 billion.

Last month, Elon Musk-led SpaceX made history with the biggest IPO of all time, with the rocket and satellite company aiming to operate data centers in space.

The AI and data center IPO space is busy. 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 used by hyperscalers.

– Dana Bartholomew