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 at large 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.