TierPoint, a provider of connected data center and cloud solutions at “the edge” of the Internet, has reached an agreement that will result in new, preferred equity investments totaling $320 million, which the company expects to be closed and funded by mid-April.
The investment is meant to provide growth capital to fuel TierPoint’s “continued momentum.” Net proceeds, after transaction fees and expenses, will also be used to repay TierPoint’s second lien credit facility in full and reduce the balance outstanding under the company’s revolving credit facility.
The $320 million of preferred equity is led by a consortium of new investors: Argo Infrastructure Partners, Wafra, and Macquarie Capital Principal Finance. Existing investors – including Cequel III, Ontario Teachers’ Pension Plan, RedBird Capital Partners, The Stephens Group, and Thompson Street Capital Partners – will also participate.
“Jerry Kent and the TierPoint senior management team have proven themselves as leaders in the digital infrastructure sector, and we are excited to partner with the TierPoint team to help fund the company’s next phase of growth,” said Fawaz Al-Mubaraki, Chief Executive Officer of Wafra. “TierPoint is well positioned for robust growth that will allow the company to expand its market leading position and capitalize on the tailwinds supporting the data center industry.”
40 U.S. Data Centers
“This investment agreement was reached in what we all know is a very challenging environment. That’s a testament to the strong performance TierPoint has already achieved and our prospects for continued growth,” said Jerry Kent, Chairman and CEO of Tierpoint. “Our business has tremendous momentum. In the last two years, we’ve increased sales bookings by 26% and the first quarter of 2020 will be another outstanding growth period. Our team of world-class technology professionals are diligently focused on providing exceptional client service, with a compelling hybrid IT strategy and comprehensive suite of market-leading infrastructure solutions that are in high demand.”
TierPoint also has a geographically diversified footprint across the U.S. with over 40 data centers in 20 markets and 8 multitenant cloud pods, connected by a coast-to-coast network.
“We’re also in a unique position to help our customers navigate the current crisis,” added Mr. Kent. “We have a very strong balance sheet, with significantly reduced leverage and improved liquidity, an infusion of growth capital, and we believe, a long runway of growth ahead of us, as we continue to invest in our services, infrastructure, and people.”
Citi and DH Capital served as financial advisors to TierPoint in the transaction and Goldman Sachs advised RedBird Capital.