logo
bullish

DXN Ltd

DXN AU Entitlement Offer Repriced

499 Views23 Mar 2020 11:01
Issuer-paid
SUMMARY

DXN Ltd (ASX:DXN) is a vertically integrated prefabricated modular data centre business with manufacturing facilities in Perth and its own data centre, SYD01, at Sydney Olympic Park in Sydney.  In response to the recent market volatility, DXN has withdrawn its previous entitlement offer with funds to be returned to applicants. The company is now offering a two-for-three non-renounceable   offer at $0.02/share to raise $6.07m, with an attached $0.04/share option expiring in three years’ time. Proceeds from the offer will fund the acquisition of TasmaNet’s Data Centre 3 revenues and assets ($2.43m), $1.03m in general working capital, $2.0m for product manufacturing working capital for DXN Modules and data centre marketing. DXN noted that despite the current environment, the commercial appeal of the acquisition of DC3 remained unchanged nor had the company’s plan to expand it carrier neutral Edge data centre footprint in Australia. The company also streamlined its board to three directors which will save costs. We have reset our forecasts in light of the near term uncertainty being presented by COVID-19, which potentially could delay the timing for orders for prefabricated modular data centres. Adjusting for this, a higher equity risk premium and the revised entitlements offer, our base case DCF valuation is $0.12/share. This puts DXN on a 12-month forward EV/sales of 7.5x, a substantial discount to its larger data centre peers.

Begin exploring Smartkarma's AI-augmented investing intelligence platform with a complimentary Preview Pass to:
  • Unlock research summaries
  • Follow top, independent analysts
  • Receive personalised alerts
  • Access Analytics, Events and more

Join 55,000+ investors, including top global asset managers overseeing $13+ trillion.

Upgrade later to our paid plans for full-access.

or
Already have an account? Sign In Now
Discussions
(Paid Plans Only)
chart-bar
Logo
Research as a Service (RaaS)
Insightful Financial Models and Research Analysis
AustraliaEquity Bottom-UpThematic (Sector/Industry)
Price Chart(Sign Up to Access)
analytics-chart
  • DXN AU Entitlement Offer Repriced
    23 Mar 2020

Copyright © 2022 Smartkarma Innovations Pte Ltd. All Rights Reserved. v3.34.2

x