London-listed Cordiant Digital Infrastructure is set to return to the market just a few months after its launch as it seeks to raise a further £250 million ($353 million; €289 million).
The fund, which raised £370 million in its IPO in February, last week announced the placing of further shares following the agreement of its first deal earlier this month, buying Czech national transmission company Ceske Radiokomunikace from Macquarie Asset Management
It is now looking to raise further capital as it seeks to capitalise on a pipeline valued at about £800 million. In addition to a memorandum of understanding signed to acquire a fibre-optic network in Norway, the vehicle is also assessing data centre deals in Scandinavia and North America, as well as a multi-asset tower portfolio in Europe, Steven Marshall, chairman of Cordiant Digital Infrastructure, told Infrastructure Investor.
“We think £250 million is probably the right sort of level of appetite that is out there,” he said. “We do have the opportunity to leverage the assets at 50 percent, although we tend to be conservative as much as we can.”
The deal with Macquarie, in addition to the MoU in Norway, is comprised of £318 million in equity and a further £133 million in debt. Ceske Radiokomunikace was acquired by Macquarie’s European Infrastructure Funds II and III and Macquarie Mercer Infrastructure Trust in 2010, in a deal valued at a total of €574 million. According to Marshall, Macquarie had been readying an IPO for the company before Cordiant heard about the plans and made an unsolicited offer.
“An asset like that is a national champion and has long-term contracts,” Marshall said. “Macquarie has done a good job in driving diversification of the business, built additional towers, developed some of the property facilities to create edge data facilities and several kilometres of fibre. The timing was right for us and we were very fortunate. Had we made that call two weeks later, we probably would have missed it.”
Marshall was also bullish on Ceske Radiokomunikace’s broadcasting side of the business, which he believes gets overlooked in some digital infrastructure deals. The company’s assets include a portfolio of digital broadcast towers that would be challenging to replace or replicate, Cordiant said.
“Broadcast is a much misunderstood business,” Marshall argued. “There’s massive pressure on the fibre and data centre industry to be environmentally friendly. The difference between broadcast and streaming is a massive environmental difference, which most people are not recognising. The electricity drain on the system is fundamentally different and you will see over the next 5-10 years the broadcast service becoming an absolutely embedded integral part of the future of terrestrial networks.”