Celestica has announced a proposed $3 billion common stock offering to finance investments supporting increased customer demand across its global AI and data center infrastructure business.
The company plans to issue the shares through a treasury offering and grant the underwriters a 30-day option to purchase up to an additional 15% of the number of shares initially offered.
The potential overall size of the transaction would increase if the underwriters exercise that option in full.
Celestica intends to use the net proceeds for working capital, capital expenditures and other general corporate purposes.
The company said the financing will provide greater balance-sheet flexibility as it invests to address what it described as unprecedented, multiyear demand from its customers.
Celestica provides design, engineering, manufacturing, supply-chain and platform services for technology companies. Its infrastructure work includes high-performance AI compute systems and data center Ethernet networking products.
The company is seeking to expand its capabilities and production capacity as hyperscalers, cloud providers and other customers invest in increasingly powerful computing and networking infrastructure.
Celestica said visibility into the global AI infrastructure buildout continues to improve, giving the company greater confidence in making long-term investments.
The offering is intended to help Celestica scale alongside customers’ capital deployment plans and capture opportunities across AI compute and high-speed networking.
These investments could include additional manufacturing capacity, equipment, working capital and supply-chain resources needed to support new customer programs and production ramps.
Celestica specifically highlighted opportunities involving 800-gigabit and 1.6-terabit Ethernet networking technology, as well as AI and machine-learning compute programs serving data center customers.
Demand for these systems is being supported by continued investment from hyperscalers, AI companies and data center operators seeking to train and deploy increasingly capable models.
Celestica operates through two broader business segments, including Connectivity & Cloud Solutions. Management said demand from Connectivity & Cloud Solutions customers has reached an unprecedented level.
The company believes its engineering and manufacturing position allows it to benefit from a multiyear upgrade cycle across AI servers, networking systems and related data center infrastructure.
However, the pace of expansion remains subject to factors including component availability, customer deployment schedules, product qualifications, construction timelines and access to electricity, water and other data center resources.
The offering would strengthen Celestica’s ability to fund capacity investments while maintaining liquidity as it supports simultaneous customer programs.
BofA Securities and Citigroup are serving as joint lead bookrunners for the offering. TD Securities is also acting as a bookrunner.
The transaction remains subject to customary closing conditions, including the execution of an underwriting agreement and approval to list the additional common shares on the New York Stock Exchange and Toronto Stock Exchange.
The company did not disclose the number of shares it expects to issue or the offering price.
Celestica said the capital raise reflects management’s confidence in its demand outlook and the scale of the AI infrastructure investment cycle.
The company provides technology and manufacturing services across AI, cloud and hybrid-cloud infrastructure, along with other advanced technology markets.
KEY QUOTES:
“We are experiencing accelerating momentum across our business, giving us strong conviction to continue investing behind our capabilities.”
“Maintaining a robust capital structure with enhanced balance sheet flexibility is central to executing our long-term strategy, ensuring we can seamlessly scale alongside our customers’ evolving multi-year capital deployment plans.”
Mandeep Chawla, Chief Financial Officer of Celestica
“Strong operational execution across both segments, combined with unprecedented demand from our Connectivity & Cloud Solutions customers, underscores the significant scale of the AI infrastructure buildout.”
“Our demand outlook is the strongest in the company’s history, and our multi-year visibility continues to strengthen. Celestica’s market leadership and disciplined execution, fully supported by this transaction, position us to capitalize on this secular growth and deliver long-term shareholder value.”
Rob Mionis, Chief Executive Officer of Celestica
