Data Center Provider Switch Raises $531M in IPO

Pricing its shares above the top end of the range it previously targeted, data center provider Switch raised $513 million in its initial public offering Thursday. Its shares will start trading on the New York Stock Exchange Friday under the ticker symbol SWCH.

The Las Vegas-based data center provider sold its Class A stock at $17 per share (instead of the expected $14 to $16 per share) in what was the second-largest tech IPO so far this year, following Snap’s IPO in March, in which the social networking company raised $3.4 billion. The offering gives Switch a market value of $4.2 billion, according to Reuters.

Switch operates data centers in Las Vegas; outside of Reno, Nevada; and outside of Grand Rapids, Michigan. It’s also building a data center campus in the Atlanta market and has data center joint ventures in Italy and Thailand.

Switch’s premier customers include eBay (its largest) and Amazon, among about 800 others.

eBay and its affiliates accounted for 13 percent of Switch’s 2016 revenue, which was $318.4 million.

The company’s 2013 revenue was $166.8 million, meaning its compound annual growth rate has been 24 percent over the last three years.

Switch reported $31.4 million in net income for 2016 and $73.5 million in 2015. Its 2015 revenue was $265.9 million.

Find a lot more in our in-depth DCK Investor Edge series on the Switch IPO:

The Unique Proposition of a Switch IPO

Switch IPO Part 2: Warnings in the Fine Print