Megaport’s A$200M Placement to Acquire Latitude.sh and Boost Revenue 20%

Strategic Acquisition to Expand Compute Capabilities

Megaport Limited (ASX – MP1), a global leader in Network-as-a-Service, has announced a significant equity raising of A$200 million to fund the acquisition of Latitude.sh, a rapidly growing Compute-as-a-Service platform, alongside an accelerated expansion of its network footprint in India. The acquisition, valued at an upfront US$150 million with an additional contingent consideration of up to US$150 million tied to revenue and integration milestones, marks a pivotal step in Megaport’s evolution from a network provider to a combined network and compute platform.

Latitude.sh brings a highly automated, high-performance compute infrastructure that complements Megaport’s core strength in network automation. Serving over 1,150 customers across 10 countries with a modern fleet of more than 7,700 servers, Latitude.sh has demonstrated impressive growth with an annual recurring revenue (ARR) of US$43.1 million as of September 2025 and a compound annual growth rate exceeding 50% over the past three years.

Creating a Unified Platform for Hybrid Cloud and AI

By integrating Latitude.sh’s compute capabilities with Megaport’s global private high-speed network, the combined entity aims to offer enterprises seamless, on-demand access to both compute and connectivity. This convergence is designed to power critical workloads in cloud, AI, and data centre ecosystems with low latency and high efficiency. Megaport’s CEO Michael Reid highlighted that this acquisition extends their promise beyond network connectivity into optimised compute, positioning the company at the heart of the hybrid cloud and AI-driven future.

Financially, the acquisition is compelling – the upfront price represents a multiple of 3.5 times Latitude.sh’s September 2025 ARR and 8.3 times its adjusted EBITDA for FY25. The deal is expected to boost Megaport’s revenue by over 20% and adjusted EBITDA by more than 40% on a pro forma FY25 basis, while maintaining strong unit economics with an 18-month payback on CPU investments.

Expansion into India and New Compute Division

Alongside the acquisition, Megaport is investing approximately A$43 million to accelerate its network expansion in India. This includes acquiring a leading local network operator with around 400 active customers and presence in 40 data centres, as well as deploying Megaport’s hardware to broaden service offerings. This move responds to strong demand from existing customers seeking access to the Indian market.

To manage the new compute capabilities, Megaport will establish a dedicated Compute Division led by Latitude.sh’s CEO, reporting directly to Megaport’s CEO. This division will benefit from Megaport’s go-to-market resources and plans to build a specialist sales team focused on compute enterprise sales, signaling a strategic shift to capture growth in the US$13 billion Compute-as-a-Service market, which is forecast to grow at 20% annually over the next three years.

Equity Raising and Market Position

The A$200 million placement will issue approximately 14 million new shares at A$14.30 each, representing an 8.6% dilution of existing shares. Funds will cover the upfront cash component of the Latitude.sh acquisition, India expansion, transaction costs, and provide additional liquidity. Megaport’s FY26 guidance remains unchanged, excluding the acquisition and India expansion impact, leaving some uncertainty about the full-year outlook once these are integrated.

Overall, this bold move by Megaport signals its ambition to become a comprehensive platform provider for network and compute services, leveraging synergies to meet growing enterprise demands for hybrid cloud and AI infrastructure worldwide.