SINGAPORE (Sept 18): Mapletree Industrial Trust (MIT) has closed an upsized private placement of a total of 176.6 million new units at $2.265 each – the top of the issue price range – to raise gross proceeds of nearly $400 million.
The private placement was approximately 6.3 times covered, after taking into account the exercise of the upsize option to issue 18.3 million additional new units.
The private placement was launched Tuesday to help fund MIT’s acquisition of a US$1.37 billion ($1.88 billion) data centre portfolio in North America in a joint venture with Mapletree Investments.
The target portfolio consists of 10 data centres from seller Digital Realty at a purchase consideration of US$557.3 million.
MIT and Mapletree Investments will also enter into a joint venture with Digital Realty to acquire an 80% stake in three existing Digital Realty hyper-scale data centres at a purchase consideration of US$810.6 million.
MIT’s share of the total acquisition cost comes up to approximately $965.0 million.
Approximately $393.6 million, or 98.4% of the gross proceeds of the private placement, will be used to partially fund the acquisition cost, while the remaining $6.4 million will go towards the estimated fees and expenses incurred in connection with the private placement.
The manager of MIT has said it intends to fund the remainder of the total acquisition cost via debt.
It says the private placement saw strong participation from a broad spectrum of investors, including new and existing institutional investors.
The issue price of $2.265 per unit represents a discount of approximately 2.7% to the volume weighted average price for all trades in MIT from the preceding market day on Sept 16 up to the time the placement agreement was signed on Sept 17.
The manager says it believes that the private placement is an efficient and overall beneficial method of raising funds to finance the acquisition.
The proposed acquisition is expected to be distribution per unit accretive to unitholders on a pro forma basis, based on the proposed funding structure in respect of the financial year ended March 31, 2019.
In connection with the private placement, the manager intends to declare an advanced distribution for the period from July 1 to the date immediately prior to the date on which the new units are issued, which is expected to on Sept 26.
The advanced distribution is currently estimated to be between 2.91 cents and 2.95 cents per unit.
MIT has called for a trading halt before market open on Sept 17 to announce the launch of the private placement. Units in MIT last closed at $2.33 on Sept 16.