DALLAS — Editor's note: This story was originally published in the Dallas Business Journal here.
Dallas-based DataBank has raised $533 million in both equity financing and debt to support the construction of new data centers as demand surges amid a boom in artificial intelligence.
DataBank Holdings Ltd. announced Nov. 28 it raised $188 million in equity, with $138 million coming from existing investors and $50 million coming from new investors. The company also received a $345 million construction loan for a new data center set to open in the third quarter of 2024 about 20 minutes outside of Atlanta.
The company has been raising capital so it can build new data centers and expand existing ones to provide businesses with more capacity as they adopt AI. Last year, DataBank completed a $2.2 billion recapitalization led by Swiss Life Asset Management AG.
The latest transactions come on the heels of almost $1.6 billion in financing announced by DataBank earlier this year. DataBank raised $715 million in March from secured notes for new data center capacity at existing campuses in Salt Lake City, Denver, Atlanta, and New York. It then obtained a $350 million credit facility in April, led by TD Securities.
"This new financing will allow us to continue bringing important capacity to market to meet extremely high demand for data center space and power," DataBank President and Chief Financial Officer Kevin Ooley said in a statement.
Ooley said the company's ability to get "favorable" loan terms and participation from existing equity investors so soon after its recapitalization reflects "the ongoing confidence of our investment partners and their willingness to seize the growth opportunity of the AI era ahead of us."
DataBank's footprint consists of more than 65 data centers in more than 27 markets, including in the United Kingdom and France. The company announced in October it purchased 95 acres for the new campus outside of Atlanta. Two weeks ago, the company also announced it acquired 85 acres of land for a new campus in Culpeper, Virginia.
Atlanta and northern Virginia are two of the largest data center markets, according to CBRE statistics reported by the Atlanta Business Chronicle, a sister publication of the Dallas Business Journal. Northern Virginia is the world's largest data center market with 2,132 megawatts of total inventory while Atlanta is a nearly 300-megawatt market, according to CBRE.
The adoption of AI has increased power demand. A typical data center may need up to 25 megawatts of power while an AI-driven data center starts at almost 100 megawatts, according to the Atlanta Business Chronicle.
DataBank itself has experienced a wave of growth over the last several years. In 2020, DataBank tripled its data center footprint through the $1.4 billion acquisition of zColo. At the time, the company said the combined entity would have about 700 employees.
In Texas, DataBank last year purchased several data centers in the Houston area from Carrollton-based CyrusOne. At the time, the company said it would own 2 million square feet of raised-floor data center capacity. Also in 2022, DataBank brought on Chief Operating Officer Joe Minarik, who previously worked to develop Amazon’s data center network.
First Citizens, MUFG, and CoBank acted as joint lead arrangers and joint bookrunners for DataBank's debt transaction, with First Citizens as the administrative agent. Jones Day served as legal counsel.
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