Csquare raises $1.05B in IPO priced below range as AI demand cools
What's the deal? CsquareDealroom has a profile for this one. Try Dealroom →, a Dallas-based data center operator backed by Brookfield Asset ManagementDealroom has a profile for this one. Try Dealroom →, priced its initial public offering at $21 per share on Wednesday, raising $1.05 billion. That was below its $23-$27 target range, valuing the company's equity at about $3.25 billion.
Why below range? Csquare sold 50 million primary shares to test investor appetite for AI infrastructure amid signs of cooling demand in recent weeks. Shares closed down 1.57% on the first day of trading, following a late rally.
What led up to it? The listing caps a three-year turnaround for Brookfield, which began with the 2023 bankruptcy of Cyxtera TechnologiesDealroom has a profile for this one. Try Dealroom →. The investment manager combined Cyxtera's assets with 31 data centers acquired from AT&TDealroom has a profile for this one. Try Dealroom → in 2018, positioning the new entity for rising AI infrastructure demand.
What could go wrong? Proceeds go almost entirely to repaying debt, including a $771 million revolving credit facility and a $75 million promissory note held by Brookfield — a use of funds that may have discouraged some investors. Brookfield also took a $785 million distribution last year, more than four times Csquare's $172 million of 2025 operating cash flow.
The company is growing but unprofitable. It expects first-half revenue to rise 14%-16%, yet lost $66 million in the first quarter on revenue of $270.5 million, and first-half interest expense is set to climb 71%.
What's the endgame? Expansion will demand more capital. Csquare has identified 670 megawatts of potential additional capacity at $4 million-$8 million per megawatt, implying up to $5.4 billion in spending. Much of its portfolio wasn't built for the largest high-density AI workloads.
"They're going to have to make investments in their data centers," said Tim Caulfield, the founding chief executive of Evoque Data Center Solutions, the business Csquare carved out of AT&T.
The signal: Csquare is one of just 19 private equity-backed companies to list on US exchanges this year, together raising about $81 billion, per PitchBook. That is a fraction of 2021's record $259 billion across 96 listings — but average proceeds per listing are running about 60% higher, a sign of a thinner, more selective market.
Read more: investor.csquare.com, morningstar.com
