Switch enters Texas with $420m Data Foundry acquisition

04 May 2021 | Antony Savvas

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Switch has entered the Texas market after acquiring Data Foundry for $420 million in an all cash transaction - and capturing two data centre campuses in Austin and Houston.

The deal is expected to be completed by “mid-2021”, said Switch. The transaction provides “attractive future expansion opportunities in Texas”, added the firm.

The move expands the Switch portfolio to 16 operational data centres across six locations and adds over 400 customer logos to its portfolio.

Switch founder and CEO Rob Roy said: “The acquisition extends Switch’s national reach and enhances our ability to serve Texas and the Central US region with low latency connectivity, while also providing critical geographic and revenue diversification with robust expansion potential.”

Data Foundry’s Austin campus includes three current facilities with expansion capabilities up to 44MW at full build-out. The Houston campus has one existing data centre with the ability to support 18 MW of customer power at full build-out.

Switch says it intends to commence development on new data centres in both Austin and Houston at the end of 2021, with the first sectors available for customer deployments in 2023, it said.

For the first quarter, Switch said it expected sales to reach up to $131.5 million, with adjusted EBITDA at up to $73.5 million.

At the end of last month, Data Foundry (pictured) said it had “won new rights for businesses to challenge discriminatory energy rates” imposed by municipalities. The company won a Texas Supreme Court decision against the City of Austin.

In 2016, Austin Energy, the City of Austin’s municipal power authority, conducted a consumer rate review in which Data Foundry participated in. After the rate review was completed new higher rates were imposed from 1 January 2017 - which the firm didn't agree with.