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Network as a Service operator Megaport (ASX: MP1) is expanding its global operations through the acquisition of Latitude.sh, an automated compute infrastructure group, in a deal worth up to US$300 million ($459 million) that the Brisbane-headquartered company anticipates will accelerate its global growth ambitions.
Megaport has launched a $200 million capital raise to fund the cash-and-scrip acquisition which will comprise an upfront payment of US$150 million ($229.5 million) with contingencies for an additional US$150 million should Latitude.sh achieve prescribed earnings targets over the next three years.
Latitude.sh is a compute-as-a-service company that delivers high-performance compute infrastructure which is Megaport says will extend its core capability of automating network infrastructure for hybrid cloud.
Megaport says the acquisition will create a global software platform where networks and compute converge to connect critical workloads.
By integrating Latitude.sh into Megaport’s global private high-speed network, the company says enterprises will be able to spin up compute and seamlessly interconnect with clouds, partners and data centers worldwide, on-demand.
“Megaport has long been trusted by the world’s largest enterprises to move workloads seamlessly between data centres and the cloud,” says Megaport CEO Michael Reid.
“By bringing Latitude.sh into the fold, we’re extending that promise beyond the network – into high-performance, optimised compute.
“This acquisition marks a new chapter for Megaport. We are building a global platform where network and compute converge.
“This positions Megaport at the heart of the hybrid cloud and AI-driven future.”
Latitude.sh’s automation platform serves more than 1,150 customers in 10 countries, with its services offered through a modern fleet of more than 7,700 servers, with its CPUs having an 18-month payback period and generating a 3x money multiple.
Megaport notes that Latitude.sh is a fast-growing business that has boosted annual recurring revenue at a compound annual growth rate of more than 50 per cent a year.
Latitude.sh delivered annual recurring revenue of US$43.1 million ($69.9 million) as at September this year and for the six months ending 30 June 2026 it is estimating to achieve revenue of between US$25 million ($38.2 million) and US$30 million ($45.9 million).
Megaport sees the acquisition providing strategic entry into a high-growth market that extends Megaport beyond the network into a US$13 billion compute market that is expected to grow at 20 per cent a year.
“The market is being supported by customers increasingly seeking to run critical workloads globally, with low latency,” says Megaport.
Megaport is also expanding its India operations through a separate $43 million investment that includes the acquisition of a “leading network operator” with a local team, about 400 active customers, 40 data centre locations and annual recurring revenue of $6 million.
The company notes that there is strong demand from existing Megaport customers for access to India.
The upfront payment of US$150 million for Latitude.sh comprises US$70 million in cash and the issue of about 7.8 million Megaport shares worth US$80 million.
To fund the acquisition, Megaport has announced a $200 million fully underwritten institutional placement at $14.30 per share, which is a 6.5 per cent discount to yesterday’s closing price.
Megaport is also offering existing shareholders the chance to participate in a non-underwritten share purchase plan to raise up to $20 million for working capital.
In a trading update, Megaport reveals a solid performance for the first four months of FY26 with annual recurring revenue hitting $260.1 million for October, up 22 per cent from a year ago.
First-quarter revenue for FY26 of $62.9 million is up 21 per cent from the previous corresponding period.
Excluding any impact of the Latitude.sh acquisition, the company says its guidance for FY26 remains unchanged.
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