Canberra Data Centres (“CDC”) was founded in 2007 and is the largest provider of outsourced data centre co-location services to the Australian Federal Government. CDC currently operates 3 data centre facilities Hume 1, Hume 2 and Fyshwick 1. In addition to the 3 existing sites, CDC has started construction on Hume 3 (on adjacent land to Hume 1 and 2) and is also planning Fyshwick 2. This will culminate in a “dual campus” CDC network.
Quadrant was first attracted to the business due to the high quality contracted revenues (majority revenue from government agencies with long term contracts), significant barriers to entry, attractive market fundamentals, market leading position in the sector and significant growth opportunities.
Our investment thesis focussed building on building the data centre footprint, capturing more market share from existing clients (to enhance the government ecosystem within the CDC network), optimise pod yield, service managed service providers working with government and winning more outsourced services from government.
Quadrant initially invested 49.9% into CDC alongside the founding shareholders and management in September 2014. Earnings increased by more than 100% from $25.0 million in 2014 to a run-rate of $50.0 million in May 2016 (forecast of over $70 million for FY2017).
Quadrant achieved and oversaw a number of operational and structural including
- The building of the Fyshwick 1 facility
- The development of brownfield expansion at Hume and Fyshwick
- Expanding services to existing customers
- Conversion of a significant pipeline of new Federal Government customers
- Servicing a number of managed service providers underpinning government
- Investment in the operations and finance teams to accelerate growth
Quadrant and existing shareholders signed a binding agreement to sell CDC to Commonwealth Superannuation Corporate and Infratil (managed by H.R.L Morrison) for $1,100 million in May 2016.
“Quadrant initially invested 49.9% into CDC alongside the founding shareholders and management in September 2014."