Switch & Data Completes IPO

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Colocation provider Switch & Data Inc. went public yesterday with an IPO that raised about $200 million. The company’s shares are trading on the NASDAQ under the symbol SDXC. Switch & Data sold 11.7 million shares at $17 each, somewhat higher than the previously reported range of $14 to $16.

Shares immediately moved higher, briefly trading as high as $22 a share before closing at $19.00. The first-day pop, while nothing like the Netscape days, reflects investor interest in the data center sector after a strong showing in 2006.

Nine million of the shares were sold by the Company and 2,666,667 shares were being offered by stockholders. According to an amended Form S-1 filed with the Securities and Exchange Commission, the offering represents a 35 percent stake in Switch & Data. Underwriters, which include Deutsche Bank Securities Inc. and Jefferies & Co. Inc., have the option to buy up to 1.8 million shares more to cover overallotments.

Switch and Data operates a network of neutral colocation facilities, with 34 data centers in 23 markets serving more than 800 customers. Switch and Data’s PAIX provides peering and Internet exchange services.

The company has a history of losses, including a loss of $12.4 million in the first six months of 2006 on $54 million in revenue, compared to a loss of $15.2 million and revenue of $52 million in the year-ago period.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.