Applied Digital – a designer, builder, and operator of next-generation digital infrastructure for HPC applications – entered into a $5 billion perpetual preferred equity financing facility, with investment vehicles of funds managed by MAM, for its HPC business conducted through APLD HPC Holdings (APLDH), a subsidiary of Applied Digital.
Under the terms of the unit purchase agreement executed, APLDH will be issuing perpetual preferred equity units and common equity units for investment by MAM of $2.25 million for each executed lease of 1 MW of capacity, up to $900 million to support the full 400 MW build-out of the Ellendale HPC Campus.
The proceeds from MAM, in connection with future project financing, will be used to complete the buildout of the 400 MW Ellendale HPC Campus, repay the existing bridge debt, currently outstanding at approximately $180 million, allow the company to recover over an estimated $300 million of its equity investment in the Ellendale HPC Campus, fund platform G&A, and pay transaction expenses. MAM also has a right of first refusal on all future HPC data center project funding, up to an additional $4.1 billion for 30 months following close.
The closing of this facility is conditioned upon APLDH executing a lease with a hyperscaler for its 100 MW Ellendale HPC data center under construction acceptable to MAM, completion of the APLDH limited liability company operating agreement and other ancillary documents, and other customary closing conditions. At closing, MAM will fund $225 million with additional amounts drawable upon APLDH executing further leases acceptable to MAM and other customary draw conditions.
Northland Capital Markets acted as sole placement agent to the company. And Goldman Sachs acted as senior financial advisor to the Company. Citizens JMP Securities and TD Securities acted as financial advisors to the Company. Needham & Company acted as financial advisor to the Company’s board of directors. Lowenstein Sandler acted as legal counsel to the Company. Simpson Thacher & Bartlett acted as legal counsel to MAM.
KEY QUOTES:
“We believe this expanded relationship with MAM positions Applied Digital for significant growth in the industry, establishing Applied Digital as one of the fastest-growing HPC data center owners, operators and developers in the United States. At today’s build costs, we will have a significant portion of the equity needed to construct over 2.0 GW of HPC data center capacity, including our Ellendale HPC Campus.”
“With an 85% ownership stake in both existing and future HPC assets and access to a project-level preferred equity financing facility sufficient to fund our HPC project pipeline, we believe we are poised for transformative progress. We are excited to have MAM’s support as we establish ourselves as a leader in the Tier 3 data center infrastructure sector, while continuing to develop and operate large-scale, state of the art data centers for world-class customers at the forefront of the AI revolution.”
- Wes Cummins, Chairman and CEO of Applied Digital
“We are excited to partner with Applied Digital to build and scale its HPC data center platform. Applied Digital has a differentiated strategy with access to a unique near-term power portfolio across North America in markets attractive for computing needs which address the most demanding AI and other HPC applications at scale. The significant progress at the Ellendale HPC campus makes this a very compelling opportunity for us as well as for potential hyperscale customers. With our global experience as an owner and manager of data center platforms, we see this as highly attractive opportunity to help build an industry-leading HPC data center company well positioned in these high growth segments of the market.”
- Anton Moldan, Senior Managing Director of Macquarie Asset Management
