Compass Datacenters Announces $3 Billion Expansion Plan
Receives Significant Follow-On Investment from RedBird Capital Partners and Ontario Teachers’ Pension Plan. Joined by new partner Azrieli Group
July 18, 2019
DALLAS--(BUSINESS WIRE)–Compass Datacenters, LLC (“Compass” or the “Company”) today announced new growth initiatives to develop up to $3 billion in new data center campuses over the near term. This follows additional capital from existing investors, RedBird Capital Partners (“RedBird Capital”) and Ontario Teachers’ Pension Plan (“Ontario Teachers”), as well as new investment partner the Azrieli Group (“Azrieli”) (TASE: AZRG), a leading Israeli real estate development company.
The continued support from RedBird Capital and Ontario Teachers’ and the introduction of Azrieli to the investor group, reinforces Compass’s momentum across its key markets, including construction starts at its Phoenix and Northern Virginia data center campuses. The additional capital and financial commitments will allow the Company to accelerate its growth plans and better serve its customer base.
“Over the past two years, with the strong support of RedBird Capital and Ontario Teachers’, Compass has successfully led the wave of cloud and hyperscale data center providers in delivering just-in-time facilities customized to meet the specific requirements of our customers. This investment from our partners and the addition of the Azrieli Group, a world-class real estate developer, is an important milestone affirming the value we’re creating for our customers, as well as the significant opportunity ahead,” said Chris Crosby, CEO of Compass Datacenters. “We’re excited to accelerate our goal of developing upwards of $3 billion in new data center campuses, while continuing to enhance the value proposition we deliver to our customers.”
“Chris and the Compass team have done a tremendous job over the last few years positioning the company to address the continued unmet demand in the data center market with bespoke campus development solutions for its customer base,” said Gerald Cardinale, Managing Partner of RedBird Capital. “We are excited to welcome the Azrieli Group to our investment partnership – with our collective financial and strategic capabilities, we are well-positioned to support the company as it enters its next major expansion phase.”
“This follow-on investment positions Compass to expand its growth plans significantly and scale its proven strategy in the fast-growing but highly competitive data center market,” said Jane Rowe, Executive Managing Director, Equities, Ontario Teachers’. “We’re excited to support Compass’s continued execution by focusing on innovative customer solutions, while leveraging the experience and knowledge of its talented management team.”
“The Azrieli Group has been evaluating the data center space for some time, and we have great respect for Chris and the Compass team,” added Danna Azrieli, Chairman of the Azrieli Group. “We believe in Compass’s campus-focused strategy and the opportunity to scale its growth plans around its proprietary technology. We look forward to collaborating closely with the Compass team, as well as our new investment partners RedBird Capital and Ontario Teachers’.”
Compass has grown rapidly over the past two years, establishing and expanding its presence in key markets across the United States, including Boston, Columbus, Dallas, Minneapolis, Nashville, Northern Virginia, Phoenix, Raleigh-Durham and others. Compass has altered the landscape of the data center market with its design architecture, which makes dedicated data centers cost-competitive with wholesale, multi-tenant spaces for the first time.
The Company recently launched construction on the first two data centers within its Phoenix and Northern Virginia campuses. The company is actively developing campuses in core markets which demonstrate high demand from cloud and hyperscale companies. This campus model is a natural evolution of Compass’s business approach, delivering high-quality dedicated data centers with industry-leading delivery timeframes and cost-efficiencies. The initial buildings in greater Phoenix and in Loudoun County, Virginia are being constructed to meet the customized needs of customers within Compass’s relationship network.
Citi and DH Capital served as financial advisors to Compass in the transaction, while RBC Capital Markets served as financial advisor to the Azrieli Group. Fried, Frank, Harris, Shriver & Jacobson LLP and Wick Phillips served as legal counsel to Compass and its investors, while DLA Piper LLP and Barnea Jaffa Lande & Co served as legal counsel to the Azrieli Group.
About Compass Datacenters
Compass Datacenters provides solutions from the core to the edge. The company serves cloud and SaaS providers, enterprises, colocation and hosting companies, and customers with distributed infrastructure requirements. Compass’s investors, Ontario Teachers’ Pension Plan, RedBird Capital Partners and the Azrieli Group, bring a long-term perspective and significant financial resources. The Company’s executive team has built over $4 billion data centers and edge computing facilities and has operated over ten million square feet of raised floor facilities worldwide. Compass delivers build-to-order data centers which are superior to competing alternatives, enabling its customers to build “what you want, where you want, when your business needs it”. For more information, visit www.compassdatacenters.com.
About RedBird Capital Partners
RedBird Capital Partners is a principal investment firm which provides flexible, long-term capital to help entrepreneurs grow their businesses. Based in New York and Dallas, RedBird seeks investment opportunities in growth-oriented private companies in which its capital, investor network and strategic relationships enable business owners to achieve their corporate objectives. Founded by former Goldman Sachs Partner Gerald Cardinale in 2014, RedBird has invested and/or led $2.5 billion of equity to support its entrepreneur-led platforms, connecting patient capital with business founders to help them outperform operationally, financially and strategically. For more information, please go to www.redbirdcap.com
About Ontario Teachers’ Pension Plan
The Ontario Teachers’ Pension Plan (Ontario Teachers’) is Canada’s largest single-profession pension plan, with $191.1 billion in net assets (all figures as at Dec. 31, 2018). It holds a diverse global portfolio of assets, approximately 80% of which is managed in-house, and has earned an annual total-fund net return of 9.7% since the plan’s founding in 1990. Ontario Teachers’ is an independent organization headquartered in Toronto. Its Asia-Pacific region office is located in Hong Kong and its Europe, Middle East & Africa region office is in London. The defined-benefit plan, which is fully funded, invests and administers the pensions of the province of Ontario’s 327,000 active and retired teachers. For more information, visit http://otpp.com and follow us on Twitter @OtppInfo.
About Azrieli Group
The Azrieli Group is an Israeli public company traded in the Tel Aviv stock exchange (included in the TA-35 index and the TA-125 index) and is the only Israeli real estate company included in the European Public Real Estate Association index (EPRA). The Group has a market cap of NIS 28.2 Billion (approx. US$8 Billion) and is the 6th largest company in the Tel Aviv Stock Exchange (TASE). The Group holds properties with GLA of approx. 13,000,000 sq. ft. including an array of office buildings, malls and senior housing facilities in Israel and overseas. Additionally, the Group incorporates a development pipe-line of more than 10,400,000 sq. ft. For further information, visit our website at www.azrieligroup.com.