Switch hopes to raise half a billion dollars through IPO
Tue 26 Sep 2017
Leading data centre provider Switch is hoping to raise up to $500 million (approx. £372 million) through its initial public offering (IPO).
The Las Vegas-based firm is offering around 31 million shares at a cost of between $14 and $16 each. Should the shares be sold at the higher end of this range, the market value of the company would rise to nearly $4 billion.
Switch’s announcement of the terms of the IPO means that if the offering raises as much as is expected, it will be the third largest technology IPO of the year, following social media leviathan Snap’s $3.9 billion listing and U.S. broadband provider Altice USA’s $2.2 billion sale.
The offering is being led by a number of major institutional investors, including Goldman Sachs, JPMorgan Chase & Co, Bank of Montreal, and Wells Fargo & Co. A source close to the proceedings told Bloomberg that JPMorgan will be the ‘syndicate trading manager’, giving it greater responsibility for the process.
Switch produces data centre hardware and provides data centre management solutions. According to its website, it manages to be both of higher quality and better value than its competitors, thanks to the innovations and patented designs of its reclusive CEO, Rob Roy.
The firm’s website states: ‘Rob Roy designed, patented and manufactures 80% of his data centre modules completely eliminating 60% of the mark-up inherent with building a data centre.’
This strategy appears to have been successful, with the company reporting profits for the past four years, with net income of $73.5 million on revenue of $265.9 million in 2015, and income of $31.4 million from revenue of $318.4 million last year – suggesting a period of growth and expansion for the company.
Though notoriously protective of its assets, it was announced earlier this year that Switch had issued licenses to Schneider to use its patented technology. However, the generosity only extended so far, as it threatened legal action against firms that used its technology without permission.