Applied Digital Corporation (Applied Digital) said it has entered into an agreement with Macquarie Asset Management (MAM) for funding of up to USD 5 billion to enable high performance computing (HPC) growth. The financing will accelerate the development of Applied Digital's data center projects, including the 400 MW Ellendale HPC Campus.
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Key Terms of the Financing Agreement
Under the agreement, Applied Digital subsidiary APLD HPC Holdings LLC (APLDH) will issue equity units, with MAM committing USD 2.25 million per megawatt (MW) of leased capacity. This arrangement could provide up to USD 900 million to complete the full 400 MW build-out of the Ellendale project, repay approximately USD 180 million in bridge debt, recover USD 300 million in equity investments, and fund operational and transaction costs. Additionally, MAM holds a right of first refusal on USD 4.1 billion of Applied Digital's future data center funding over a 30-month period.
"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," said Anton Moldan, Senior Managing Director of Macquarie Asset Management. "The significant progress at the Ellendale HPC campus makes this a very compelling opportunity for us as well as for potential hyperscale customers."
Vision for HPC and AI Infrastructure
"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," said Wes Cummins, Chairman and CEO of Applied Digital.
"With an 85 percent 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," continued Cummins. "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."
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Equity Details
The preferred equity offers a 12.75 percent annual dividend and a minimum 1.80x capital return. The common equity represents 15 percent of APLDH’s fully diluted common equity at issuance. MAM's equity can be redeemed by APLDH at any time after the fifth anniversary of the closing, Macquarie said in a joint statement on January 14, 2025.
Closing conditions include securing a lease with a hyperscaler for 100 MW of Ellendale HPC data center. MAM will provide an initial USD 225 million, with additional funding contingent on further lease executions.
