Applied Digital Corporation Enters Unit Purchase Agreement with Macquarie Asset Management for Up to $5 Billion Investment

Applied Digital Corporation, a designer, builder, and operator of next-generation digital infrastructure for HPC applications, has recently entered into a significant Unit Purchase Agreement (UPA) with Macquarie Asset Management (MAM). The UPA entails a substantial investment commitment of up to $5 billion to drive the growth of Applied Digital’s High-Performance Computing (HPC) data center business segment.

Under the UPA, Applied Digital’s subsidiary, APLD HPC Holdings LLC, agreed to sell 225,000 Preferred Units in the Issuer at a price per Preferred Unit of $1,000, amounting to an aggregate purchase price of $225 million. Additionally, the Purchaser is to be granted up to $4.1 billion on the same terms to finance future HPC data center development projects over the next 30 months following the Closing.

The Preferred Units issued will accrue a dividend at a rate of 12.75% per annum, to be incrementally adjusted over time, and carry a minimum 1.80x multiple of invested capital liquidation preference. Furthermore, Applied Digital is entitled to additional $1.0 million cash distribution per MW funded upon the completion of the ELN Campus construction. The UPA also allows for customary rights and obligations concerning governance, management, co-sale, as well as transfer restrictions.

The Closing, anticipated within fifteen business days after meeting specific conditions, heralds a transformative opportunity for Applied Digital, positioning it as a prominent player in the HPC data center domain. The investment not only bolsters the growth prospects of Applied Digital but also solidifies its foothold in the HPC infrastructure marketplace.

The forward-looking statements in the UPA emphasize the company’s vision to leverage the investment to construct state-of-the-art data centers for advanced AI workloads, with the intention to excel in the rapidly evolving tech landscape. The partnership with MAM signifies a strategic move by Applied Digital to establish itself as a key player in the Tier 3 data center infrastructure sector, reinforcing its commitment to innovation and growth.

For more detailed information on this significant development, investors and stakeholders are encouraged to refer to the full text of the UPA and related documents filed with the Securities and Exchange Commission. The partnership between Applied Digital and MAM aims to set new standards in the HPC data center arena, fostering innovation and technological advancement in the digital infrastructure landscape.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Applied Digital’s 8K filing here.

Applied Digital Company Profile

Applied Digital Corporation designs, develops, and operates datacenters in North America. Its datacenters provide digital infrastructure solutions to the high-performance computing industry. The company also provides artificial intelligence cloud services, high performance computing datacenter hosting, and crypto datacenter hosting services.