Investors Flow $1.2B In Vantage Data Centers To ‘Accelerate’ Expansion

Fast-growing Vantage Data Centers gets injected with $1.2 billion in capital to accelerate its data center expansion plans.

With data center construction and growth not skipping a beat during the coronavirus pandemic, investors are pouring $1.2 billion into rapidly growing Vantage Data Centers as the company eyes significant expansion globally.

Vantage Data Centers has entered into an agreement and joint venture to form a strategy partnership with a group of investors to accelerate the expansion of its wholesale data centers throughout North America and Europe. Investor group Colony Capital, who already owns a stake in Vantage, said it will invest $200 million in new capital while the remaining $1 billion will be provided by other investors who will acquire a stake in the company’s 12 North American data centers.

[Related: CyrusOne Hires Data Center Outside As Its New CEO]

Sureel Choksi, president and CEO of Vantage, said the injection of capital will new up new market opportunities.

“Vantage and its investor group are now even more well positioned to capitalize on a number of attractive market opportunities and deploy the necessary capital to drive innovation, deliver state-of-the-art facilities for our customers, and accelerate our expansion plans in existing and new markets globally,” he said in a statement.

Fueled by more than $800 million in already generated by private equity funding, the Denver-based data center provider in February acquired Luxembourg-based Etix Everywhere, gaining the company’s data center portfolio which included a 55-megawatt campus in Germany.

Vantage Data Centers has secured land and is planning to develop multiple hyperscale data center campuses in Berlin, Milan, Warsaw and Zurich. The company has unveiled plans to development five new facilities including a 64-megawatt campus in Berlin; 55-megawatt campus in Frankfurt; 32-megawatt campus in Milan; 64-megawatt campus in Warsaw; and a 40-megawatt campus in Zurich.

Vantage is striving to win large deals in the hyperscale data center market which has taken over the industry in the last several years led by Apple, Amazon, Facebook, Google and Microsoft. These giant cloud providers are spending billions each quarter on building and equipping massive facilities, known as hyperscale data centers, on a global basis.

The total number of large data centers operated by hyperscale providers jumped to 541 at the end of the second quarter of 2020. AWS and Google opened the most new data centers in the last 12 months, accounting for over half of the total, followed by Microsoft and Oracle.

“There were 100 new hyperscale data centers opened in the last eight quarters, with 26 of those being in the first half of this year,” said John Dinsdale, a chief analyst at Synergy Research Group. “COVID-19 has caused some logistical issues but these are robust numbers, demonstrating the underlying strength of the services that are driving these investments.”

Vantage Data Centers 12 centers span more than 1.4 million square feet and 150-megawatts of IT capacity across markets in Santa Clara, California; Quincy, Washington; Montreal and Quebec City, Canada.

The $1.2 billion transaction is expected to close later this month. Colony Capital manages a $50 billion portfolio including over $20 billion in digital real estate investments through Digital Colony, its digital infrastructure platform.