DigitalBridge Group (NYSE: DBRG), through its flagship private equity fund called DigitalBridge Partners II (DBP II), alongside IFM Investors, which is backed by Australian pension funds, today announced that they have agreed to acquire Switch Inc (NYSE: SWCH), a retail colocation provider focused on the enterprise data center segment, for $34.25 per share in cash, implying an equity value of $8.4bn and an enterprise value of $11bn for the business. As a result, Switch Inc is being valued by DigitalBridge and IFM at ~31x 2022E EBITDA and ~27.5x 2023E EBITDA.

In terms of timing, the parties expect the transaction to close in the second-half of 2022, at which time Switch Inc will become a privately-held company.

READ MORE: Switch Inc, DigitalBridge and IFM: $11bn Merger Process In-Depth

Today’s announcement follows a flurry of data center M&A activity over the past 12 months, which includes KKR and GIP’s $15bn take-private of CyrusOne, American Tower’s $10.1bn purchase of CoreSite, and Blackstone’s $10bn acquisition of QTS Realty Trust.

Switch Inc – Overview

Switch Inc operates 5 data center campus locations (branded as PRIMES), which encompass 16 colocation facilities, representing up to 508 megawatts of power capacity and 32.4k cabinets. Overall, these data centers comprise 5.1 million gross sqft (GSF) in the United States, supporting over 1.35k customers. Furthermore, by 2030, Switch plans to construct more than 11 million additional square feet of capacity.

Switch’s customer base is highly concentrated, with its top 10 customers together producing 36.7% of its revenue as of Q1 2022. Notably, Switch’s largest customer is eBay, an E-commerce company, which comprises 13.5% of the company’s revenue. Additionally, Switch counts large enterprises and technology companies including FedEx, Dell, Intel, Apple, PayPal, and Box as key customers.

Switch Inc Data Center Campuses PRIMES Map

Geographically, Switch’s 5 data center campuses include the Core Campus (Las Vegas, Nevada), Citadel Campus (Tahoe Reno, Nevada), Rock Campus (Austin, Texas), Pyramid Campus (Grand Rapids, Michigan), and Keep Campus (Atlanta, Georgia).

Financial Performance and Guidance

In Q1 2022, Switch Inc reported revenue of $164.6m and adjusted EBITDA of $86.8m, implying an EBITDA margin of 52.7%. Therefore, on an annualized basis, Switch Inc generates revenue of $658m and adjusted EBITDA of $347m.

For full-year 2022, at the mid-point, Switch projects revenue of $667m and adjusted EBITDA of $351m, implying a 52.6% EBITDA margin.


Switch Inc is led by its founder Rob Roy, who has served as the company’s Chief Executive Officer and Chairman of the Board since its formation. Roy first began developing data center facilities in 2000, merging several predecessor companies into Switch, Ltd after its formation. Most notably, in 2002, Roy purchased Enron’s former telecommunications hub in Las Vegas for <$1m from the bankruptcy court.

Transaction Advisors – DigitalBridge, IFM, Switch Inc

DigitalBridge and IFM’s financial advisors were RBC Capital Markets and TD Securities. Additionally, DigitalBridge and IFM’s legal advisor was Simpson Thacher & Bartlett. Finally, DigitalBridge and IFM’s debt financing for the transaction was led by TD Securities, alongside arrangers and bookrunners Société Générale, RBC Capital Markets, and Citizens Bank.

Switch Inc’s financial advisors were Goldman Sachs and Morgan Stanley. Additionally, Switch Inc’s legal advisor was Latham & Watkins.

DigitalBridge – Data Centers in the United States

Beyond Switch Inc, DigitalBridge presently has significant investment exposure to data center operators in the United States through its portfolio companies Vantage Data Centers, DataBank, and Landmark Dividend / Infrastructure. Below are further details on the data center portfolios of these companies:

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.


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