Private equity snaps up datacenter operator Switch for nearly $11b

DigitalBridge Group and global infrastructure investor IFM Investors to acquire all outstanding shares


US datacenter operator Switch Inc is to be purchased by private investors led by DigitalBridge Investment Management in an all-cash transaction for approximately $11 billion.

Switch, which operates datacenters based around high-performance infrastructure, said it entered into a definitive agreement with DigitalBridge Group and global infrastructure investor IFM Investors to sell all its outstanding common shares for $34.25 per share.

Switch founder and CEO Rob Roy said in a statement that the acquisition was an important step for the growth and evolution of the company, and would mean it could continue to meet the demand from customers for its Tier 5 datacenter infrastructure.

"The combination of our advanced datacenter infrastructure, significant expansion capacity in our land bank, and a new partnership with experienced digital infrastructure investors lays a strong foundation," Roy said.

Switch opened its fifth Prime datacenter campus in Texas last year, and said it plans to build more than 11 million additional square feet of capacity between now and 2030. The company also claims to operate all of its North American datacenters entirely using renewable energy.

The company reportedly got a foothold in the datacenter business when Roy bought a facility built by Enron in an auction.

For its part, DigitalBridge said it is building up a global digital infrastructure investment platform, and that the Switch buy gives it a wider portfolio to tap into ever-growing demand for infrastructure.

DigitalBridge appears to have been very busy lately, announcing its intention to buy AMP Capital's Global Infrastructure Equity Investment Management Business last month, and Telenet's Mobile Telecommunications Tower Business in March.

The company also led a funding round of $360 million (£295 million) in the UK for Netomnia and YouFibre, and $220 million to suppot Everstream.

DigitalBridge recently reported calendar Q1 financials for the three months ended 31 March with total revenue growing to $257.5 million, compared to $220.5 million a year earlier.

Net losses shrank to $339.4 million from $364 million.

The acquisition by DigitalBridge was unanimously approved by the board of directors at Switch, but is subject to approval by Switch stockholders and regulatory conditions.

The Switch transaction is expected to close in the second half of 2022. ®

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