Las Vegas-based Switch is buying Texas colocation provider Data Foundry for $420 million. The deal gives Switch a fifth large data center campus in Austin.
Data Foundry has four multi-tenant data centers, three in the Austin campus and one in Houston. The deal is expected to close around the middle of 2021, pending regulatory approval.
The Texas Switch
Switch refers to Austin as its fifth "Prime" campus, giving it coverage of all the US. Its four existing hubs consist of two in Nevada (Tahoe Reno covering the northeast, and Las Vegas covering the southeast) and two in the East - the Pyramid in Grand Rapids Michigan, and the Keep in Atlanta Georgia. All told, Switch will have 16 operational data centers in six locations, with scope to expand and build more.
“Data Foundry is proud to partner with Rob Roy and the Switch team in this transaction that we believe will carry forward our company’s rich history of innovation in Texas, and will result in tremendous long-term benefits to our customers and all stakeholders of the combined business,” said Carolyn and Ron Yokubaitis, co-founders of Data Foundry.
Data Foundry has facilities in Austin and Houston: the Austin campus has three data centers and can expand to 44MW, while the Houston campus has one data center and can expand to 18MW.
Switch plans to start building almost immediately in Austin and Houston, at the end of 2021, with new capacity available in 2023.
One thing the two providers have in common is that both have taken on their local utility provider in court to gain consumer benefits, against monopolistic practices.
Last month Data Foundry won the right to complain about the electricity prices imposed by Austin Energy, the municipal power authority in the City of Austin. In 2016, the utility reviewed its rates and demanded a rate which Data Foundry said was unfair. After being told it could not make such a complaint, Data Foundry appealed, and the Texas District Court has now ruled that Data Foundry, and other consumers in Texas, can challenge bills they regard as excessive.
Also in 2016, Switch sued NV Energy and the Public Utilities Commission of Nevada for the right to switch suppliers, after it complained that NV Energy had been overcharging it for renewable power, in a $30 million lawsuit.
“We are extremely pleased to reach an agreement with Data Foundry and to announce the launch of our Fifth Prime Data Center Campus in Texas,” said Switch founder and CEO Rob Roy.