From startup to decacorn: how CDC built a $17 billion data empire

While working as a branch manager for an IT company in Canberra in the early 2000s, Greg Boorer, Founder and CEO, CDC Data Centres (CDC) could plainly see organisations were hindered by a lack of data centre infrastructure. The issue was particularly acute at government entities, as they were embracing more technology systems producing vast quantities of data — much of it sensitive — but lacked a secure and efficient way to store it. The availability of government systems was also impacted by frequent power outages in office buildings.

Boorer was struck by the idea of aggregating the systems and technology footprint of customers into a highly secure and resilient, co-located data centre. This would provide efficiencies of scale and cost-effective solutions. At the time, the natural environment was being ravaged by the Millennium Drought, the period between 2001 to 2009 where a combination of low rainfall and the lowest inflows into the River Murray in recorded history meant flows over the border into South Australia virtually ceased. Boorer resolved to create a data centre that did not rely on water consumption for its cooling operations.

Taking a leap of faith

Boorer pitched the idea of outsourced data centres to his employer, Ken Lowe, Owner, ASI Solutions, who agreed to invest in what would become Canberra Data Centres’ first purpose-built data centre. It was established out of a warehouse in Hume, Canberra, in 2007.

It was a massive leap of faith. Looking back, Boorer describes his approach as “build it and they will come”, as he had no signed contracts in place before the data centre was built.

“The journey wasn’t easy,” he recalls. “It took two years to secure the first megawatt of capacity and it was a period marked by risk, persistence and hard work. Despite these challenges, the company steadily grew, with more data centres being developed.”

Building a lasting partnership

That same year, CommBank provided the first of multiple sources of capital to CDC, as it would become known. This enabled the business to expand from Canberra into Sydney, Melbourne and Auckland.

“We’ve been in a relationship with CDC since 2007 and have supported them through a number of acquisitions and refinancings over that period,” says Michael Thorpe, Managing Director and Head of Corporate Client Coverage, Institutional Banking and Markets, CommBank. “The pivotal point in the relationship occurred when Infratil acquired CDC in 2016, and the Bank provided growth capital as part of the acquisition to allow CDC to execute on its growth ambitions and scale to the business it is today.”

The total cash equity consideration of $392 million gave Infratil exposure to the emerging data and related telecommunications infrastructure sector.

The pivotal point in the relationship occurred when Infratil acquired CDC in 2016, and the Bank provided growth capital as part of the acquisition to allow CDC to execute on its growth ambitions and scale to the business it is today.” 
– Michael Thorpe, Managing Director and Head of Corporate Client Coverage, Institutional Banking and Markets, CommBank

Innovative financing for growth

CommBank was also pivotal in securing the inaugural US private placement (USPP) mandate and executing a complex cross-currency swap (CCS), a move which facilitated CDC’s expansion.

Other carefully structured financial interventions have been imperative to CDC’s growth. One such intervention included unlocking new sources of capital by introducing the company to a diverse pool of investors and extending CDC’s maturity profile. CommBank’s team in Australia and New York has connected CDC with longer-term capital providers.

“This has helped us to grow the business and reduce our refinancing risk,” says Boorer.

Prioritising security and sustainability

From the outset, CDC has targeted customers who were integral to the functioning of Australian society — specifically government, critical infrastructure organisations and their strategic technology partners. This clear business model was paired with another key strategic element — to design specifically for government and critical infrastructure needs. CDC’s core design embeds the principles of high security, sovereignty and sustainability.

“All our data centres are built to the highest of standards of security to ensure the protection of the most sensitive and critical data that supports the progress of our nations, across Australia and New Zealand,” says Boorer. “These elements remain key differentiators for CDC in the ANZ data centre market.”

In what is seen from the outside as a commoditised industry, CDC has thrived by listening to customer needs and adapting accordingly, says Boorer.

“Security is a top priority for our target customers, who cannot and will not compromise on the protection of their data and systems. CDC plays a crucial role in safeguarding this through robust physical, cyber and personnel security measures. This focus on security is woven into the very DNA of CDC, a priority that has never been more critical, especially given the current geopolitical landscape and growing cyber threats.”

For the past 15 years, CDC’s compounded earnings have stood at over 30 per cent, which is nothing short of remarkable. With a current equity value of more than $17 billion, the company plays a critical role in supporting national economic wellbeing, safety and security.

“Security is a top priority for our target customers, who cannot and will not compromise on the protection of their data and systems.”
– Greg Boorer, Founder and CEO, CDC Data Centres

Leading the industry with innovation

CDC’s business model is flexible enough to adapt to the changing needs of its customers, and responsive enough to anticipate future needs. One example is its commitment to reducing water consumption using liquid cooling technology to foster high-performance workloads, including those from supercomputing and the increasing demand from artificial intelligence. While other data centres continue to use vast quantities of water every year, CDC is saving millions of litres.

“We are seeing a significant growth in the use of new technologies like liquid cooling to improve efficiency and offset power usage through renewable energy such as wind and solar,” says Boorer. “They are all key to securing the progress of our customers.”

A vision realised

Despite the massive growth over the past 17 years, CDC’s mantra of “build it and they will come” still holds true.

“The growth of data centre demand, along with our value offering, means we are building to meet customer demand,” says Boorer. “We are signing contracts for 30 or more years with our customers, so it’s important we are also securing long-term capital to give stability to the business. As we are growing, we must ensure we have access to multiple funding sources, so expanding into new markets has been essential.”

According to Thorpe, who has led the team working with CDC for the past seven years, the partnership has been a natural fit for CommBank.

“CDC has always been a standout player in this market,” he says. “Its CEO and founder, Greg Boorer, has always had a vision as to where he saw the need for storing data to go. CommBank was able to understand that vision, as well as the industry it operates in, and is pleased to have delivered a number of capital funding alternatives CDC needed to grow. We look forward to the continued strong partnership we have with CDC and to supporting their strategy.”