CDC Independent Valuation

Friday 4th April 2025

As a result of the transaction announcement in February, the primary valuation methodology applied by the independent valuer at 31 March 2025 was adjusted from a Discounted Cash Flow (‘DCF’) approach to a Historical Transaction approach. After being provided details of the outcome and nature of the sale process conducted by CSC, the valuer confirmed their view that the transaction met all criteria to be considered fair market value and subsequently adopted A$13,701 million as the mid-point of its independent valuation.

This implies that Infratil’s 48.17% investment in CDC is now valued at between A$6,066 million and A$7,208 million (with a midpoint of A$6,600 million), up from A$4,485 million to A$5,385 million (with a midpoint of A$4,924 million) at the end of December 2024.

As communicated in February, Infratil agreed to acquire approximately 1.58% of CDC’s ordinary shares for ~A$216 million, with Future Fund acquiring the remainder (10.46%) of the 12.04% stake being sold by CSC. The transaction was secured under CDC’s pre-emptive rights regime, following a competitive international bidding process run by CSC. Completion of the acquisition is subject to customary closing conditions, including Foreign Investment Review Board (‘FIRB’) approval. Financial close is expected in the second half of 2025.

Given the historical use of DCF as the primary methodology, a secondary cross-check using this approach was also conducted and resulted in an implied cost of equity of 11.1%, down from 12.5% as assessed in December 2024. The decline in the implied cost of equity can be attributed to a decrease in gearing across the forecast period (given the increase in equity value), as well as a reduction in the asset-specific risk premium. The risk-free rate, asset beta and terminal growth rate remain unchanged.

The growth forecast underpinning CDC’s build capacity to FY2034 remained largely unchanged from December 2024, with the exception of the completion of extensions to two of CDC’s data centres in Auckland. This increased CDC’s operational capacity by a further 16MW to 318MW and continues to demonstrate CDC’s strong track record of delivering projects on time and to budget.

CDC Independent Valuation – 31 March 2025

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