Interxion shares soared as much as 18 per cent as debut of the Dutch data centre operator on the New York Stock Exchange highlighted the value the stock market was prepared to put on technology infrastructure.
The group listed at $13 a share on Friday, the top end of its $11-$13 price range, after raising $265m in its flotation on the NYSE. Investor interest was strong enough for Interxion to raise the total number of shares it planned to sell from 18.6m to 20.4m. Existing shareholders, which include former chief executive Michel Boussard, will sell 4.1m shares compared to initial plans to sell 2.3m, according to a filing with the Securities and Exchange Commission.
Analysts estimate the $13 per share debut price will give the group a post-flotation enterprise value of around $1bn. The shares rose as high as 415.40 in morning trade before settling back at $14.45, up 11.2 per cent.
The net proceeds will be used to build new data centres and extend existing ones, including an expansion of Interxion’s City of London site, as it looks to compete with rivals, such as stock exchanges for financial services clients.
Interxion’s solid debut underlined the high value that investors are placing on technology infrastructure. Telecity, the group’s closest European peer, has seen its valuation more than triple in the last two years while yesterday Verizon, the US telecommunications group, announced plans to buy Terremark, a data centre group, for $1.4bn, a 35 premium to the closing price.
Interxion specialises in co-location services, in which brokers place their servers next to the exchanges’ servers, to shave crucial milliseconds off the time it takes for trades to be done. By attracing more firms to the same location, it creates a small trading hub which mimics a traditional open outcry trading floor but in which trading is automated.
The Dutch group has 28 data centres in 11 European countries. For the nine months ended September 30, 2010, Interxion made an operating profit of €34.3m ($45m) from revenues of €152.8m. That compared to an operating profit of €24.5m and revenues of €126.6m for the same period a year earlier.
The group is 58 per cent-owned by Baker Capital, the US investment group, and the holding is expected to fall to less than 50 per cent following the offering. BofA Merrill Lynch, Citi and Barclays Capital will act as joint bookrunning managers for the offering
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