Csquare Inc., a data centre company backed by Brookfield Corp., is seeking to raise as much as US$1.35 billion in a United States initial public offering. The company is offering 50 million shares for US$23 to US$27 each, according to a filing Monday with the U.S. Securities and Exchange Commission. At the top of the price range, the market valuation would be US$4.18 billion, based on the outstanding shares listed in the filing.
Financial Performance and Revenue Streams
According to the filing, Csquare reported a net loss of US$66 million in the three-month period ended March 31, alongside revenue of US$270.5 million. This compares with the year-ago period, when it had a net loss of US$34.9 million on revenue of US$232.8 million. Most of the company’s revenue is generated from recurring co-location and interconnection services, with contracts ranging from one to seven years.
Use of IPO Proceeds
Dallas-based Csquare, which began operations in 2019, owns and operates more than 60 data centre sites in the United States, Canada, and the United Kingdom. The company expects to use the IPO proceeds to repay in full its revolving credit facility, which had US$734 million outstanding at the end of March, as well as a US$75 million promissory note held by Brookfield, along with a portion of its outstanding US$4.3 billion of asset-backed notes.
Brookfield's Continued Control
Brookfield is expected to maintain voting control over Csquare after the offering, the filing shows. This ensures the asset manager retains influence over the data centre operator's strategic direction.
AI Infrastructure Boom Drives IPO
The IPO comes as Wall Street is laser-focused on all things related to artificial intelligence, especially AI data centre infrastructure. Applied Digital Corp., which operates in a similar space, is up about 35 per cent this year, while Equinix Inc. has jumped 31 per cent and Digital Realty Trust Inc. has gained 12 per cent. Csquare's offering is part of a series of AI-related IPOs this year, including AI chipmaker Cerebras Systems Inc., whose May listing raised US$6.38 billion. Blackstone Inc.’s data-centre acquisition vehicle raised US$2 billion the same month, and SpaceX made history in June with the biggest IPO of all time, with the Elon Musk-led company pitching data centres in space.
Underwriters and Stock Symbol
Csquare’s offering is being led by Morgan Stanley, Toronto-Dominion Bank, Wells Fargo & Co., Bank of America Corp., Bank of Montreal and Bank of Nova Scotia. The company expects its shares to trade on the New York Stock Exchange under the symbol CSQR.
