This ASX All Ords share is raising $130 million to ride a megatrend

Macquarie Technology is looking to increase its exposure to the AI boom.

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Key points

  • Macquarie Technology is raising $130 million
  • It is seeking to raise the funds at a 7.6% discount to its last close price
  • The company is benefiting from significant megatrends and is looking to take advantage of this

The Macquarie Technology Group Ltd (ASX: MAQ) share price won't be going anywhere on Tuesday.

That's because the ASX All Ords share has requested a trading halt this morning.

Why is this ASX All Ords share in a halt?

Macquarie Technology requested a trading halt today while it seeks to raise $130 million via a non-underwritten institutional placement to support its data centre business in the next phase of growth.

These funds will be raised at $58.50 per new share, which represents a 7.6% discount to the last traded price of $63.29.

Management notes that the additional capital will strengthen the company's balance sheet and provide funding to pursue growth opportunities in its data centre portfolio. It currently has five data centres in operation with a pipeline for additional growth.

The institutional placement is also expected to significantly increase liquidity and free float.

What's the rationale?

The company explained that it is raising funds in order to increase its exposure to megatrends that are creating significant tailwinds. This includes the artificial intelligence (AI) boom we are experiencing right now. It said:

As our economy becomes more digitised, organisations are moving their data and software applications to the cloud. Clouds live in the latest generation of data centres, like ours. Data Centres are digital infrastructure along with our cloud and cyber security platforms. AI is the next significant megatrend for data centres and the digital economy driving higher power density and demand for capacity. As these two megatrends combine, we expect to see very strong demand for the latest generation of data centres.

So, with the next wave of data centre demand now arriving in Australia, management believes the institutional placement strategically positions the company to capitalise on the fast-growing cloud and AI megatrends.

In other news, the ASX All Ords share has reaffirmed its FY23 EBITDA guidance of approximately $102 million to $104 million.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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