Data centre company DXN to be acquired by Singapore's FLOW Digital Infrastructure for $26 million

ASX-listed colocation provider DXN will be acquired by Singapore-based FLOW Digital Infrastructure for $26 million.

FLOW’s Australian unit, Flow2Edge Australia Pty Ltd will acquire all of DXN’s business assets and subsidiaries TAS01 Pty Ltd, Secure Data Centre Pty Ltd and the SDC Unit Trust.

DXN said the proceeds of the acquisition will be used to repay debts and to be paid out to shareholders, estimated to be in the range of $0.011 to $0.013 per share.

“We have not taken this decision lightly. This transaction is not only a good offer, it also enables us to address the capital requirements for the business going forward,” DXN chairman John Baillie said.

“Further, it leverages the experience and footprint of FLOW Digital Infrastructure. We are excited about the opportunities this will create for our customers in the medium to long term.”

The acquisition is subject to conditions precedent, including approvals from the Foreign Investment Review Board (FIRB) and DXN’s shareholders at a general meeting which is expected to be held in late September 2022.

DXN’s board is also unanimously recommending shareholders to vote in favour of the acquisition, saying the proposal is “fair and reasonable to, and in the best interests” of DXN shareholders.

FLOW Digital Infrastructure chairman Kris Kumar said, “This is an exciting opportunity for FLOW as we expand our footprint and enhance our capabilities to better serve our customers. The acquisition will enable us to leverage DXN’s superior EDGE design and construction capabilities, allow us to control our supply chain, and deliver EDGE as a service in the APAC region.”

“This is a key milestone for us as we continue to strategically invest in digital infrastructure to meet the rapidly growing demand across our markets.”

FLOW, owned by Singapore-based PAG Real Estate, is a managed platform founded to develop a leading digital infrastructure platform across the Asia Pacific region. It invests in and operates physical assets that constitute the digital infrastructure ecosystem, including cloud, hyperscale, edge and enterprise data centres as well as network and fibre assets.

The company stated that the Asia Pacific region is “currently underinvested” in digital infrastructure and that there's an opportunity to address gaps in the digital ecosystem. It added the region has “substantial runway for growth” underpinned by emerging market demand, core data centres, fibre networks and edge computing. FLOW also plans to invest US$10 billion in digital infrastructure over the next five to seven years.

DXN, which specialises in pre-fab data centres, appointed Shalini Lagrutta as its new chief executive officer earlier this year, replacing Matthew Madden at the time.