Switch to Acquire Texas Data Center Operator Data Foundry for $420M

Switch is adding Texas to its list of US data center campuses by acquiring Data Foundry, a colocation operator with data centers in Houston and Austin.

Las Vegas-based Switch said Monday that it’s agreed to pay $420 million cash for Data Foundry’s business – a 19x 2021 estimated EBITDA multiple. It plans to fund the transaction through a combination of cash on hand and either credit or new debt securities.

Austin and Houston will “anchor” Switch’s fifth “Prime Data Center Campus,” giving the company its first footprint in the strategically important Central US region. Companies building nationwide compute infrastructure tend to set up on west and east coasts and in Central US.

Switch’s current campuses are in Las Vegas; Sparks, Nevada (just outside of Reno); Gaines Township, Michigan (near Grand Rapids); and Lithia Springs, Georgia (near Atlanta).

The Data Foundry acquisition will also add about 400 logos to Switch’s customer roster.

Data Foundry provides colocation, network connectivity, and cloud storage services, as well as a standard variety of managed services, such as disaster recovery, firewalls, and DDoS mitigation.

It has three data centers in Austin, with expansion options for up to 44MW total. It has one data center in Houston that can support 18MW at full buildout. Switch, which expects to close the Data Foundry acquisition by mid-2021, said it will start data center development in both Texas markets at the end of the year.