Problem: A typical data center requires $10MM in CapEx per Megawatt, and takes 18 months to build. Yet even then, due to the inefficiencies in their design, typical data centers use as much or more electricity to air-condition their sites than to run the IT equipment, making them more costly to oper…
Problem: A typical data center requires $10MM in CapEx per Megawatt, and takes 18 months to build. Yet even then, due to the inefficiencies in their design, typical data centers use as much or more electricity to air-condition their sites than to run the IT equipment, making them more costly to operate.
dcBLOX solves this problem using our BLOX™ modular enclosures to turn empty warehouse space into a data center in about 4 months, and at half the CapEx. Our proprietary system technology provides 85% better operating efficiency while supporting 5x the power density (up to 30kW per rack), so our data centers provide the highest reliability, highest rack power, best efficiency, and all at the lowest cost.
We've done it before; our team has built 11 data centers for leading IT enterprise companies and Federal agencies including the DoD and DoE. Our proprietary BLOX™ in-building modular enclosure system allows us to provide data centers for the retail colo market and never miss an order on price due to our lower overhead. This also allows us to make double the profitability of the typical data center, in a rapidly growing market. CBRE recently predicted data center demand is set to grow at 32% CAGR (’14-’18), with rents rising as supply is lagging behind.
We have two sites ready to go operational, but for capital, in Atlanta and Chattanooga. Our Chattanooga site is oversubscribed, with 114% of planned initial capacity under LOI or order, while our Atlanta site is 30% committed but with pending commitments will be over 50% committed shortly. Going forward, our focus will be mainly on adding sites to underserved Tier II cities where there is little to no competition. For example, over 100 of these smaller cities have committed to adding high-speed gigabit fiber-to-the-home or wifi networks, which will drive up the need for storage for content delivery and cloud solutions. With our low-cost / rapid-build technology, we can quickly deploy the "right-sized" data center closest to the end-users' access (“the edge”). And we are in right in line with the trend toward higher-density computing environments, since we can operate at 30kW per rack (5x the typical 5-6kW per rack) and support the most complex server and storage configurations.
Data centers typically deliver a 9x-10x EBITDA return, providing a risk-mitigated way to invest in Technology as data center infrastructure is needed regardless of how IT equipment evolves over time. Ours is an opportunity to put $15 million of capital to work to open the first two sites initially and add-on over time (in risk-controlled increments) as we build out additional centers. We believe we can quickly build a set of six facilities with an enterprise value north of $500 million (based on cap rates in the 7.5-9.5 range prevalent in the industry) and exit by 2020-21 to a REIT, strategic buyer or PE firm. The IRRs and cash-on-cash returns are very compelling.
Team (1)
Sectors dcBLOX Inc. serves:
Technology
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