DXN Purchases Tasmanian Data Center

DXN Limited (ASX:DXN), has entered into a binding agreement with TasmaNet Pty Ltd to purchase the assets and revenues of Data Centre 3 Pty Ltd (DC3), a data centre in Hobart Tasmania, for a cash price of $2.7 million, which represents 6 X EBITDA multiple, and an incentive payment of 25% of actual EBITDA growth generated by the Assets in the three years following settlement.

Matthew Madden, CEO of DXN, said that the agreement includes assets and customer revenue and is an example of how the Company will deliver on its vision to be Australia’s leading Edge data centre operator.

Madden said, “Our plan is to continue to expand our carrier neutral Edge data centre footprint in Australia and New Zealand. This target will be achieved by developing new greenfield modular data centres, such as our new Sydney DC and / or acquiring existing operating data centres such as DC3.”

The Hobart data centre is a modular DC designed to a minimum of Tier II. It has 30 racks occupied and the capacity to expand to 100 racks. DC3 is a government accredited data centre that provides services to the Tasmanian Government and is one of only three commercial data centres in Tasmania.

Madden said, “It is a condition precedent to settlement of the Acquisition that TasmaNet signs a national customer agreement with DXN with a minimum commitment of $860,000 per annum for three to five years. To the year ending 30 June 2019 (FY19), DC3 generated revenue of approximately $860,000 and EBITDA of approximately $450,000.  The Acquisition is a low-cost entry into the Edge market.

Elizabeth Aris, CEO of TasmaNet, said, “We are delighted to be working with DXN and providing ongoing support and sales activity for this data centre and other data centres that DXN roll out. The Hobart data centre has a strong customer base including key sovereign clients and we are experiencing very solid annual growth, which is expected to increase in line with nbn™ growth.”

Data consumption on the nbn™ broadband access network has increased by almost 25 per cent in the past 12 months in Australia, indicating the potential growth opportunity for the Tasmanian market. DC3 provides DXN with the ability to expand from the 30 racks currently utilised to 100 racks within the next three years, which will provide DXN for strong growth in both revenue and EBITDA generation from the Data Centre.

For the Full ASX Announcement Click here.