Element Critical continues its build its data center footprint through acquisitions, and has expanded into the Texas market this year by purchasing facilities in Houston and Austin. Expect to see more deals in the future, according to CEO Ken Parent.
“We’re looking to grow,” said Parent. “The plan is to buy quality assets, with two to three transactions a year.”
Element Critical is an expansion-minded data center provider that focuses on smaller deals in big markets, providing “tailored” data center services for enterprise customers.
The company has partnered with a “substantial capital partner” (to be officially announced at a later date) that will help support Element Critical’s continued expansion. Global investment firm Safanad continues as Element Critical’s sponsor and investor.
In 2021, the company has entered the Texas market in a big way with a pair of acquisitions.
- In March, Element Critical acquired Skybox Datacenters’ Houston One facility, a robust 100,000 square foot facility that supports high-density colocation customers, with 26 megawatts (MWs) of power. The company has already begun construction on a campus expansion that will add two new data halls and 33,000 SF of space and support up to 6 MWs of additional capacity.
- In September, the company entered the Austin market by acquiring a 7-acre campus previously operated by vXchange, which features a 62,000 square foot data center, with 7 megawatts (MWs) of power capacity.
“We like Texas in general, and we really like the Austin market,” said Parent, adding that Element Critical was an active bidder for Data Foundry, the Austin-based provider that was acquired by Switch in May for $420 million.
Element Critical will invest about $20 million in the Austin campus, and hopes to add solar panels in the parking lot and roof to generate 1 megawatt of on-site renewable energy.
“Our plan is to add renewable energy at each of our data centers,” said Parent. “We’re looking at how we can be a true leader in renewable energy.”
Growing in a Competitive M&A Market
With the Texas expansions, Element Critical now operates six data centers across five markets – Silicon Valley, Northern Virginia, Chicago, Houston and Austin – spanning nearly 700,000 square feet of data center space. The company has acquired sites operated by service providers, including Level 3, Sungard Availability Services, Skybox and vXchange.
Future acquisitions may look beyond these large markets, consistent with the changing geography of computing. “We’re definitely looking at tier two and tier three markets,” said Parent. “They will be important edge markets.”
Parent is employing an expansion roadmap familiar from his tenure as CEO of ByteGrid, building a national platform of data centers by using a sale/leaseback strategy to buy facilities with existing tenants and available expansion space. The company offers colocation, connectivity and cloud services, emphasizing strong customer service and high-touch support for enterprise customers.
