DXN Limited to retain data centres in sale to FLOW Digital Infrastructure

Prefab data centre company DXN Limited has announced it will retain its data centre business, revising its previously announced deal with the local subsidiary of Singapore-based FLOW Digital Infrastructure.

The new $20 million deal will now only involve DXN's EDGE module manufacturing business, citing the “inability to satisfy the conditions precedent” to its sale agreement to the subsidiary, Flow2Edge Australia Pty Ltd (trading as FLOW).

In a statement sent to CRN, DXN Limited chief executive Shalini Lagrutta said, "It's a good deal for DXN shareholders and also for its employees. The team is looking forward to growing DXN's edge modular offering across APAC once the deal closes."

In August, DXN announced it was selling all of its business assets and subsidiaries TAS01 Pty Ltd, Secure Data Centre Pty Ltd and the SDC Unit Trust for $26 million to Flow2Edge.

In the announcement, DXN said the proceeds of the sale of the EDGE module manufacturing business would be used to repay debts, pay shareholder dividends and provide working capital for the data centre business.

DXN added it plans to continue exploring opportunities to “extract value for shareholders” from the data centre business upon completion of the deal with FLOW.

A general meeting on the transaction is scheduled for late October 2022, where shareholders will also receive a report from an independent expert on the revised deal. The general meeting was originally slated to be held in late September before the revision.

The shareholder vote will be held sometime in late November, and the transaction is expected to complete by 15 December 2022.

CRN has contacted DXN for comment.

FLOW parent FLOW Digital Infrastructure, 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.

In August, FLOW said the Asia Pacific region was “currently underinvested” in digital infrastructure and that there was 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.