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Mapletree Industrial Trust to buy 60% stake in 14 data centres for US$210.9m

THE manager of Mapletree Industrial Trust (MIT) on Tuesday said it has entered into agreements to purchase the remaining 60 per cent interest in 14 data centres in the US from its sponsor, for some US$210.9 million.

The portfolio of 14 data centres is held by Mapletree Redwood Data Centre Trust (MRDCT), in which MIT already has a 40 per cent stake. Mapletree DC Ventures, a wholly-owned subsidiary of MIT's sponsor Mapletree Investments, holds the other 60 per cent stake in MRDCT. Upon completion of the proposed acquisition, MIT will fully own the 14 data centres.

The manager said the proposed acquisition will increase MIT's exposure to the "resilient data centres segment", enhance income stability of the enlarged portfolio, and is expected to be distribution per unit (DPU) and net asset value (NAV) per unit accretive to unitholders.

On a pro forma basis, assuming the proposed acquisition was completed on March 31, 2020, the DPU of MIT would increase to 12.66 Singapore cents, up from 12.24 cents, while the NAV of MIT would rise to S$1.68, from S$1.62, the manager said. 

The purchase consideration of US$210.9 million is derived from 60 per cent of the adjusted NAV of the MRDCT group, after taking into account the agreed value of the properties of US$823.3 million on a 100 per cent basis, less existing MRDCT group debt of US$450 million, and estimated net liabilities of about US$21.8 million, among other things.

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Meanwhile, the total acquisition cost is estimated to be about US$218 million, including acquisition fee and estimated professional and other fees. The manager intends to finance the proposed acquisition through proceeds from an equity fundraising and the issuance of the acquisition fee in units, it said.

In a separate bourse filing on Tuesday, the manager announced a proposed private placement to issue about 128.1 million new units at an issue price of between S$2.732 and S$2.80 per new unit, to raise a minimum of S$350 million. The proposed placement is also subject to an upsize option to issue up to 18.3 million more new units to raise additional gross proceeds of at least S$50 million.

The issue price range represents a discount of between approximately 5 per cent and 2.6 per cent to the volume-weighted average price of S$2.8745 per unit in MIT for trades done on June 22.

The manager intends to use about S$302.6 million, or 86.5 per cent of the gross proceeds from the placement, to fund the proposed acquisition, and about S$41.8 million, or 11.9 per cent of the gross proceeds, to repay MIT's debt, fund future acquisitions, and/or for general corporate and/or working capital purposes.

The remainder will be used to pay fees and expenses related to the proposed private placement.

As Mapletree Investments is a controlling unitholder of MIT and a controlling shareholder of the manager, the proposed deal requires the approval of MIT's unitholders at an extraordinary general meeting to be convened. 

In the event that MIT does not proceed with the proposed acquisition, proceeds from the proposed placement will be re-deployed to fund ongoing and future investments and/or to pare debt, the manager said.

MIT called for a trading halt on Tuesday morning, before this announcement. Units in MIT closed flat at S$2.84 on Monday.

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