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CDPQ, Fengate invest in eStruxture Data Centers growth

With new equity financing and expanded credit, eStruxture Data Centers has purchased a new Calgar...

Estruxtue Cal-1 Data Centre

eStruxture acquires Shaw Communications Calgary data centre now known as CAL-1 (Image courtesy eStruxture)

With new equity financing and expanded credit, eStruxture Data Centers has purchased a new Calgary facility while it continues to improve its existing centres in Montreal and Vancouver.

“We believe that we have a lot of scale within our team to do more in terms of growing out our existing footprint and adding additional facilities,” eStruxture president and chief executive officer Todd Coleman told RENX.

eStruxture’s employee roster and management team have grown from 20 in early 2018 to approximately 60 today.

eStruxture kicked off August by signing an agreement to acquire the assets of Shaw Communications Inc.’s Calgary data centre (now known as CAL-1) for an undisclosed price. The Montreal-based provider of network and cloud-neutral data centre solutions acquired all contractual relationships residing in the facility as well as the existing operational and sales teams.

The first phase of CAL-1 was commissioned in August 2015. It was awarded an Uptime Institute Tier III Design and Construction certification. The 65,000-square-foot facility can accommodate power densities of up to 30 kilowatts per cabinet. Its next-generation, free-air cooling system makes it highly energy efficient.

“It’s a fairly new facility that’s hyper-engineered with lots of pre-deployed capacity that’s under-utilized, in a market that we’ve been keeping our eye on and evaluating over the past 18 months to understand where it’s at in its economic cycle,” Coleman said of the CAL-1 acquisition.

“We believe in the end that we can bring different industries and customer segments into the Calgary marketplace.”

New credit, investment for eStruxture

The purchase followed two significant moves to increase the company’s financial resources. First, eStruxture secured an expanded $170-million credit facility with a group of Canadian banks, led by Scotiabank and National Bank of Canada, in June.

Earlier this month, eStruxture also received a new capital commitment from Caisse de dépôt et placement du Québec and Fengate Asset Management. The amount of the investment hasn’t been disclosed.

Fengate managing director and group head of private equity Justin Catalano told RENX that eStruxture is Fengate’s first data centre-related investment. He said the firm was attracted to the opportunity due to:

* attractive industry growth rates underpinned by positive macroeconomic trends;

* an opportunity to back a strong management team alongside other notable shareholders;

* the chance to deploy capital for both organic growth and mergers and acquisitions;

* and a fragmented landscape in Canada providing an opportunity to build a leading carrier-neutral data centre solution provider.

“A lot of it will be used to fund additional capital improvements as we build out incremental capacity, particularly in the MTL-2 facility,” said Coleman of the new financial resources available to eStruxture. “It will go toward the VAN-2 improvements and act as dry powder to fund future acquisitions.

“The combination of that debt and equity will be used in all of those regards and also went into the Shaw acquisition.”

eStruxture’s MTL-1, -2 and -3 centres

A $20-million expansion at eStruxture’s MTL-1 data centre in 2018 added another three megawatts of capacity while almost doubling the available space. Additional redundant infrastructure components for cooling and electrical distribution were also added.

The facility includes more than 25,000 square feet of co-location space and is served by a dual-feed power substation operated by Hydro-Québec.

“The take-up on that has been pretty precipitous and we’re substantially selling through a lot of that capacity already,” said Coleman.

eStruxture has also spent “a lot of time, money and effort” on improving its MTL-2 data centre, according to Coleman. It has been increased in size from 156,000 to 186,000 square feet, its first three-megawatt pod is fully commissioned and customers are moving in.

Fifteen megawatts of power is being pulled into the building from Hydro-Québec and 30 megawatts will be available by the end of August.

MTL-2 features dedicated office and storage space, and more than 20 carriers are on its network.

MTL-3 is a Tier III facility that was the first of its kind in the Greater Montreal Area. It has maintained 100 per cent uptime since its inception in 2009. It has more than 20 carriers on site.

eStruxture’s VAN-1 and -2 centres

Vancouver’s VAN-1 data centre is going through a $3-million expansion.

“We’re converting the top floor into data centre space, adding some additional redundancy on the cooling side of the infrastructure and building out some additional security improvements within the building,” said Coleman. “Those are well underway and will be finished by the end of the third quarter.”

VAN-1 is the only high-power density co-location facility in Vancouver. It’s capable of supporting up to 30 kilowatts per cabinet and offers significant capacity options for enterprise, media and entertainment customers. Allstream, Bell, Shaw Business Solutions and Zayo Group are among the carriers on-site.

The 54,000-square-foot VAN-2 will be able to support up to 30 kilowatts per cabinet, backed by 10 megawatts of power. This will more than triple the amount of server cabinet space available to eStruxture’s customers in the region. A dedicated fibre ring will be installed between VAN-1 and VAN-2.

Final designs and engineering plans are being wrapped up and Coleman expects construction on VAN-2 to begin in the next 60 days.

Coleman has been happy with eStruxture’s growth over the past 30 months and he anticipates more in the future.

“There are always ideas, but no solidified plans,” he said. “We have a lot on the go, but we’re constantly looking and expect to announce and do more.”

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