The sale process for Québec-based data center developer and operator QScale is advancing to the second round, according to sources familiar with the situation.

TD Securities and Scotiabank are working as sellside financial advisors to QScale’s owners on the ongoing process, the sources said. First round bids are in, and management presentations are taking place, according to the first and second sources familiar. Best and final bids are due by the end of the first quarter, the same sources said.

QScale owns and operates the 142 MW, 930,000-square-foot QO1 data center in the Québec City area.

The company is planning to build a data center in Toronto, that could require between CAD 2.5bn and CAD 4bn (USD 1.84bn – USD 2.94bn) in investment, The Logic reported in August last year, citing President and Co-Founder Martin Bouchard.

A deal for QScale would be valued at north of CAD 2bn, a third source familiar with the situation said.

Financial support

In May 2023, QScale announced that it had closed a financing round with Macquarie Asset Management-backed Aligned Data Centers. Existing shareholders include the government of Québec, through Investissement Québec, and Desjardins Capital.

QScale said at the time that it would use funds from that investment “to develop future phases of its flagship Q01 facility and fund the development of other future campuses.”

Later, in November 2024, QScale announced the closing of a CAD 170m credit facility, with an additional uncommitted accordion of up to CAD 150m, to support the development of phases 3 and 4 of the QScale Q01 Campus.

The syndicate of lenders for that financing included Desjardins Group, Scotiabank, and Export Development Canada (EDC). Desjardins Group acted as the administrative agent, sole lead arranger, and bookrunner for the facility.

QScale declined to comment. Scotiabank and TD Securities did not respond to requests for comment.