Cologix Acquired by Private Equity Firm Stonepeak

Colocation provider Cologix has been acquired by private equity firm Stonepeak Infrastructure Partners in a deal highlighting investor interest in interconnection services in regional markets. Stonepeak says it is investing $500 million to accelerate the growth of the Cologix platform, which is focused on second-tier cities and includes a presence in leading markets in Canada.

Cologix operates 24 data centers across nine markets in the United States and Canada, with facilities in Minneapolis, New Jersey, Jacksonville, Lakeland, Fla. and Columbus, Ohio in the U.S. and Canadian sites in Montreal, Toronto and Vancouver.

Cologix is notable for its focus on carrier neutral facilities and meet-me rooms in connectivity hubs in regional markets. The company has 1,600 customers, include network providers, cloud computing companies and enterprises, espeically in media and finance.

“Enterprise-grade data center infrastructure, especially when combined with robust interconnection hubs, will be increasingly important to the digital supply chain in the coming years,” said Trent Vichie, Co-Founder and Senior Managing Director of Stonepeak Infrastructure Partners. “Cologix has built an exceptional platform and team that is well positioned to accelerate growth by using the power of interconnection to support key industry trends, including content moving to the edge, the rise of cloud computing and enterprises outsourcing data centers.”

Stonepeak: Focus on Energy, Wireless

Stonepeak said Cologix gives it “a marquee platform to enter the data center and interconnection market in North America.” The deal also reflects the increasingly important relationship between data centers and the energy industry, which has been Stonepeak’s primary focus. The private equity firm was founded in 2011, and has built a portfolio of companies in natural gas, solar energy and microgrids.

Stonepeak’s portfolio also includes Vertical Bridge, wireless communications firm that owns or leases more than 7,500 wireless and broadcast systems on towers and rooftops. Although this is Stonepeak’s first data center investment, it brings considerable experience to the table in the presence of Bill Fathers, a Senior Operating Partner at Stonepeak, who worked for many years at managed hosting provider Savvis and as a cloud executive at VMware. Fathers will take a board seat at Cologix along with three other Stonepeak investors.

Grant van Rooyen will remain as CEO and Chairman of the Board, and the Cologix management team will continue to run the business. The existing Cologix investors – including van Rooyen, the van Rooyen Group, Columbia Capital, Greenspring Associates and company management – will continue to hold a “material interest” in the company and participate in future growth equity investments.

More Resources to Finance Growth

van Rooyen said that Stonepeak, which manages more than $6.4 billion in capital for its investors, is the right partner for Cologix.

“We have felt for some time that the opportunity within our markets and our sector broadly has far more potential than we have been able to practically finance,” said van Rooyen. “With this transaction and the incremental investment, we will now have the financial capacity we want and need. Over the past months we have come to greatly appreciate the investment savvy, approach to partnership and tone of Stonepeak. They are the right partner for the existing Cologix management team to be working with for the next phase of our evolution.”

Cologx investors expressed optimism as well.

“We loved this opportunity and this market 6-plus years ago, and we continue to be big believers,” said Patrick Hendy, Partner from Columbia Capital.