Vantage Raises $1.25 Billion in Equity Capital to Fund Data Center Growth

Billions of dollars continue to flow into the data center industry, as investors focus on the opportunity to finance growth for major cloud platforms.

Vantage Data Centers has raised $1.25 billion in equity funding from its current investors, led by Digital Colony, the company said today. The deal reinforces the Vantage value proposition of building wholesale data center space for hyperscale customers, including the leading players in cloud computing and online commerce.

“Hyperscale data center market demand remains strong, and this capital raise will allow Vantage to accelerate its global expansion of sustainable, large-scale campuses,” said Sharif Metwalli, the Chief Financial Officer for Vantage Data Centers. “This capital raise demonstrates our investors’ continued commitment to Vantage’s strategic growth plan.”

This marks the third transaction of $1 billion or more for Vantage in less than four months.

• In July,  Colony Capital led a consortium that will invest $1.2 billion in Vantage’s portfolio of 12 stabilized North American data centers, with Colony investing $200 million from its own balance sheet and outside investors providing $1 billion.
• In October, Vantage raised $1.3 billion in securitized notes, a debt offering backed by cash flow from operational data centers, which are leased by some of the world’s largest and most credit-worthy companies. Vantage said it will use the money to refinance outstanding debt, reducing its overall cost of capital by approximately 30 percent on average across its capital structure.

The latest investment is $1.25 billion in incremental equity capital, which will be used to fuel ongoing expansion and development across North America and Europe. Vantage is in the midst of major expansions on both continents.

“The Vantage team continues to do an amazing job supporting the growth of their hyperscale customers as they expand in North America and increasingly throughout Europe,” said Marc Ganzi, president and CEO of Colony Capital and Digital Colony. “Supporting the strategic development and financing of our partner companies is a key pillar of Digital Colony’s alpha-creation strategies, so we’re thrilled to be a part of Vantage’s next big step forward.”

Colony Capital is keeping busy, as it pursues a leading position in digital infrastructure. In the data center sector, that means two operating platforms – DataBank for retail colocation and edge computing, and Vantage Data Centers for wholesale and hyperscale requirements.

This year Vantage has deployed 68 megawatts of new capacity on its campuses in Ashburn, Virginia and Santa Clara, California. Both markets are seeing strong customer demand, with data center developers working steadily to provide inventory to keep pace.

Vantage has also embarked upon a $2 billion program to build data centers in Europe, including the acquisition of a huge hyperscale campus near Cardiff, Wales, Vantage recently opened its flagship European campus in Frankfurt, Germany, with the completion of the first phase of what will be a three-building campus delivering 55MW of critical IT capacity once fully developed.

The entry into Europe is the latest facet of an ambitious expansion for Vantage, which will have data center campuses in 11 markets by the end of 2020. Vantage Data Centers launched in 2010 with a campus in Santa Clara, and in 2017 was acquired by Digital Bridge to serve as a platform for a larger expansion into the wholesale data center industry.

Under the ownership of Digital Bridge (now part of the Colony Capital digital infrastructure empire) Vantage began developing large campuses in Northern Virginia and Phoenix. In 2018 Vantage acquired Canadian provider 4Degrees Colocation, providing a data center footprint in the power-rich market in Quebec. Europe was the next step.