Brookfield-Backed Data-Center Firm Raises $1.05 Billion in IPO

Csquare Inc. raised $1.05 billion after pricing its initial public offering below a marketed range on Wednesday.

(Bloomberg) — Csquare Inc. raised $1.05 billion after pricing its initial public offering below a marketed range on Wednesday. The data-center company backed by Brookfield Corp. sold 50 million shares for $21 each, according to a statement Wednesday confirming an earlier Bloomberg News report. Csquare had marketed the shares for for $23 to $27 apiece.

The pricing gives Csquare a market value of about $3.25 billion, based on the number of outstanding shares listed in its filings. Dallas-based Csquare began operations in 2019 and currently owns and operates more than 60 data center sites in the US, Canada and the UK, the filings show. It expects to use the IPO proceeds for purposes including to repay in full its revolving credit facility, which had $771 million outstanding at the end of June, as well as a $75 million promissory note held by Brookfield.

Brookfield is expected to maintain voting control over Csquare after the offering, according to a filing prior to the IPO. Csquare had a net loss of $66 million in the three-month period ended March 31, along with revenue of $270.5 million. That compares with the year-ago period, when it had a net loss of $34.9 million on revenue of $232.8 million.

Most of the company’s revenue is generated from recurring colocation and interconnection services, with contracts ranging from one to seven years. The IPO comes as Wall Street is laser-focused on all things related to artificial intelligence, especially AI infrastructure. It comes on the heels of SK Hynix Inc.’s $26.5 billion US listing last week, and AI chipmaker Cerebras Systems Inc., whose May listing raised $6.38 billion.

Blackstone Inc.’s data-center acquisition vehicle raised $2 billion the same month, and SpaceX made history in June with the biggest IPO of all time. The Elon Musk-led rocket and satellite company has pitched operating data centers in space. Csquare’s offering was led by Morgan Stanley, Toronto-Dominion Bank, Wells Fargo & Co., Bank of America Corp., Bank of Montreal and Bank of Nova Scotia.

The company is expected to make its debut Thursday on the New York Stock Exchange under the symbol CSQR. —With assistance from Dave Sebastian. (Updates with confirmation throughout.)