-- Infratil's (ASX:IFT) mega data center deal with an unnamed US investment-grade client is materially larger than expected, and underpins a strong buy thesis on the stock, Jarden said in a note on Wednesday.
The company's CDC Data Centres business signed a 30-year agreement with the client for 555 megawatts of capacity. CDC expects EBITDAF to exceed AU$1 billion by fiscal 2028, and reach around AU$2 billion annually once the contract is fully deployed.
The deal, the largest data center contract in Australia, could involve major US hyperscale cloud providers such as Microsoft, Amazon Web Services, or Google. Jarden said the agreement supports a growth premium in CDC's rolled-forward valuation
The risks to the deal include adverse changes in the US energy policy impacting Longroad, higher bond yields, and EBITDA falling short of forecasts, it added.
Jarden provided a buy rating and kept the price target unchanged at NZ$14.56.