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, capitalizing on Wall Street's intense focus on artificial intelligence infrastructure.
IPO Details and Valuation
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, Csquare would have a market valuation of US$4.18 billion, based on the outstanding shares listed in the filing.
The IPO is being led by a syndicate of major banks including Morgan Stanley, Toronto-Dominion Bank, Wells Fargo & Co., Bank of America Corp., Bank of Montreal, and Bank of Nova Scotia. Shares are expected to trade on the New York Stock Exchange under the symbol CSQR.
Financial Performance and Use of Proceeds
According to the filing, Csquare reported a net loss of US$66 million in the three-month period ended March 31, along with 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.
Csquare plans 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.
Business Operations and Background
Dallas-based Csquare began operations in 2019 and currently owns and operates more than 60 data centre sites in the United States, Canada, and the United Kingdom. Brookfield is expected to maintain voting control over Csquare after the offering, the filing shows.
Market Context and AI Boom
The IPO comes as Wall Street is laser-focused on all things related to artificial intelligence, especially AI 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.
This is also the latest in 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. The Elon Musk-led rocket and satellite company has pitched operating data centres in space.
