In key news on Australian stocks, Macquarie Technology Group (AU:MAQ) halted trading of its shares, while it announced the acquisition of data centres and equity raising. The company declared that the shares will stay suspended and could resume trading on Thursday, April 18, or upon the announcement of the completion of equity placement, whichever happens earlier. Year-to-date, MAQ stock has gained over 14%.
Macquarie Technology Group, earlier known as Macquarie Telecom, is a leading Australian provider of data centre, cloud, cybersecurity, and telecommunications services.
Macquarie Technology’s Data Centre Boost
Macquarie Tech has agreed to acquire its existing data centres, Intellicentre 2 and Intellicentre 3 East, and buildings at its Macquarie Park Data Centre campus in Australia from Keppel DC REIT (SG:AJBU) for AU$174 million. Through these acquisitions, the company aims to strengthen its foothold in the expanding cloud and AI markets. This move would also allow the company to further capitalize on the rising demand for data centres, fueled by AI trends.
The acquisition will be financed through an AU$90 million loan note and an AU$100 million two-tranche equity placement. Under the placement, MAG shares will be issued at $72.50, representing a 6.1% discount to Monday’s closing price of $77.21. The first tranche is expected to raise approximately AU$29.4 million. The second tranche aims to raise AU$70.6 million, subject to shareholder approval.
The acquisition is expected to be finalized in the second half of Fiscal 2024.
MAQ’s FY24 Outlook
In February, Macquarie released its results for the first half of FY24, achieving its eighteenth consecutive half-year of profitability. Looking ahead, the company anticipates its FY24 EBITDA within the range of approximately AU$108 million to AU$111 million. This projection includes an estimated data centre EBITDA of AU$34 million to AU$35 million.
Is Macquarie Technology a Good Stock to Buy?
According to TipRanks’ consensus, MAQ stock has a Strong Buy rating based on four Buys and one Hold recommendation. The Macquarie Technology share price target is AU$96.79, which is around 25.2% above the current trading level.
