Data Center Financial Roundup: RagingWire, Xand, IO, IBM

September 26, 2013

"As the fourth quarter of the 2013 fiscal year comes to a close, several companies in the data center market have been making some high-profile investments. These end-of-year deals will serve as strong statements in the coming fiscal year. Many of these investments are concentrated in new facilities, expansion of existing data centers and the deployment of new infrastructure, while there are a few other moves worth highlighting.

RagingWire Data Centers Raises $230M
Leading data center provider RagingWire announced on September 18 that the company raised a $230 million credit facility that will contribute to ongoing expansions of its data center campuses in Ashburn and Sacramento. A Bank of America Merrill Lynch-led syndicate of eight financial institutions provided the company with credit to continue funding its strategic planning. The data center provider said that its 500,000-square-foot Sacramento data center campus is nearing capacity, necessitating the construction of an additional facility, while its Ashburn colocation campus in the region’s famed “Data Center Alley” offers five data center vaults in a 150,000-square-foot facility. It plans to expand with an additional 1.5 million-square-foot campus in the area.

“We are pleased that our company is attracting significant investments from top financial institutions,” stated RagingWire chief financial officer Mark Morrow. “The credit facility is structured to give us the ability to execute our strategy to grow the company rapidly and responsibly at favorable rates and terms.”

Xand Announces More Than $200M in Additional Funding
Xand, a top provider of colocation, managed services and disaster recovery support in the Northeast, announced that it successfully raised the company’s debt financing to more than $200 million. A majority of the new funding will be allocated for acquisitions and data center expansions. The additional debt financing comes as a result of a restructuring of financial arrangements with a consortium of leading financial institutions headed by TD Securities (USA) LLC and GE Capital Markets, Inc. Xand was particularly active in 2012, making some significant regional acquisitions that increased the company’s footprint to six data centers across four states: New York, Massachusetts, Connecticut and Pennsylvania.

“We are very pleased to have funded the bulk of our acquisitions, capital improvement projects, and corporate growth activities on favorable terms with key bankers in the data center field,” stated Xand chief financial officer Robert DeSantis. “Following acquisitions and internal growth in 2012, the resulting financial performance and position of the company rendered a very attractive financing opportunity this year for a syndicate of lenders active in the data center financial markets.”

IO Files for IPO
IO, one of the companies most responsible for developing the market penetration of modular data centers, announced that it filed for an initial public offering. While their filing is confidential and currently under review by the U.S. Securities and Exchange Commission, it will be made public before the IPO officially commences. The move is relatively unsurprising, as the Phoenix-based modular data centerprovider has been laying the groundwork since it raised more than $90 million in venture capital funding last fall, CNN reported. Earlier this year, the company acquired an additional $260 million in a multi-year credit facility led by Wells Fargo, and last month appointed Michael Berry, who has experience at public companies, as chief financial officer. The successful introduction of the company’s modular data center 2.0 also fostered speculation that going public was only a matter of time.

The most recent data center provider to secure an IPO is CyrusOne, which went public in January, while QTS and Endurance International Group filed IPOs in the last two months.

IBM Invests in Latin American Market
The Latin American region represents a significant opportunity for data center operators to establish a leading presence in a growing market. IBM announced that it plans to invest $17 million toward a new data center in Bogota. The new facility will be a significant expansion from the company’s first Colombian data center, opened in 2011, and provides additional cloud computing and big data support services to companies in the country and international markets desiring on-the-ground data center space in Latin America’s fourth-largest economy. The data center services market in Colombia is expected to grow 15.3 percent in 2013 alone.

“In the current competitive environment, Colombia companies are looking for high value solutions that help them solve complexity through innovation and business insight by addressing organic growth and productivity issues,” stated Francisco Thiermann, general manager at IBM Colombia. “This new investment showcases our clients’ trust in our expertise and services, as well as the commitment IBM has made to the country’s growth.”"



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    "As the fourth quarter of the 2013 fiscal year comes to a close, several companies in the data center market have been making some high-profile investments. These end-of-year deals will serve as strong statements in the coming fiscal year. Many of these investments are concentrated in new facilities, expansion of ...