Data centre, cloud and software business DC Two (ASX: DC2) has emerged from a trading halt to announce it has raised $2.5 million in a share placement strongly supported by institutional and high net-worth investors.
DC Two’s directors also participated in the placement, which will see the company issue 16.66 million new fully shares at $0.15 each, with a 1:2 free attaching option exercisable at $0.30 per share and expiring two years from the date of issue.
Funds will be used to complete Tier III design and construction accreditation of DC Two’s Bibra Lake data centre in Perth, fulfill an estimated $2.7 million in existing contracts and expand the sales team to drive further growth with a focus on enterprise customers.
DC Two managing director Justin Thomas said the funding will unlock the ability to grow the company and scale its presence in key markets.
“We are delighted with the outcome of the placement, which has secured interest from new and existing investors who are committed to our vision of becoming a major player within the Australian data centre sector and recognise DC Two’s potential.”
The placement will be completed in two tranches with the second tranche of shares and all options subject to shareholder approval at the company’s annual general meeting scheduled for November.
Bibra Lake data centre
The Bibra Lake data centre is currently online, generating revenue and hosting DC Two’s new cloud platform.
Proceeds from the share placement will enable the company to achieve Tier III accreditation for the facility and scale its offering on a ‘per rack’ basis for co-location and specialised cloud hosting services.
The centre has the initial potential capacity to house up to 400 racks, which will be brought online in an staged approach and in line with future customer contracts.
The accreditation will make it the only Tier III facility and ISO 27001 ISMS accredited cloud platform provider in Western Australia, which DC Two said should provide it with a competitive edge when tendering for mid-market and enterprise customers requiring Tier III compliance, security and access accreditations.
The design accreditation process is expected to be complete by the end of 2021, following which final construction budgets and timetables can be prepared with a view to have construction accreditation completed in the 2022 first half.
Management and sales expansion
DC Two said the expansion of its management and sales team is currently underway with the funding allowing the company to secure additional highly credentialed personnel to drive growth and secure new enterprise customers.
The company said structural changes will also enable its managing director and senior management team to directly focus on growing revenue.
Another portion of the capital raise will be used to fulfill and execute several DC modular contracts, including an initial fixed term contract signed in June for a minimum of $926,376 over five years and an additional deal signed in August for $1.77 million over three years.