InfraTech SPAC Raises $250M in IPO, Plans Digital Infrastructure Deals

There’s a new public company shopping for a $1 billion acquisition of a digital infrastructure company. InterPrivate IV InfraTech Partners Inc. raised $250 million in its IPO Friday on the NASDAQ market, and will operate as a special purpose acquisition corporation (SPAC), with a large blank check to go shopping.

The InfraTech SPAC’s leadership is packed with veteran executives from the data center, telecom tower and hardware sectors. The CEO of the new company is Kevin Timmons, who led the buildout of hundreds of megawatts of data center capacity for Microsoft and CyrusOne. Former CyrusOne CEO Gary Wojtaszek and data center design pioneer Peter Gross are co-founders and board members for InfraTech, whose leadership also includes co-founders of American Tower Corp. and Barracuda Networks.

In the company’s debut at the NASDAQ, Timmons said the InfraTech fund intends “to change the world by turbocharging the growth of critical technology through a business combination in the ever-expanding digital infrastructure space.”

InterPrivate is an active player in the use of SPACs, investment vehicles that raise capital from investors for the purpose of acquiring a private company. InterPrivate IV InfraTech Partners Inc. is one of four SPACs sponsored by InterPrivate to capitalize on investment trends. It will trade on the NASDAQ under the symbol IPVIU, and its units opened trading Friday at about $10 a share.

The InfraTech SPAC is the latest example of the huge investment flowing into the data center sector, with global financial players raising billions of dollars in capital to fuel the data economy.  InterPrivate assembled a team of experienced executives to capitalize on this trend.

“We believe that several secular trends exist that will continue to drive a relentless demand for increasing growth of the world’s digital infrastructures,” InterPrivate said in an SEC filing. “We intend to seek digital infrastructure companies that are on what we believe to be a promising growth path, driven by a sustainable competitive advantage, with significant opportunities for acceleration by a partnership with us.”

CEO Kevin Timmons said the InfraTech fund intends “to change the world by turbocharging the growth of critical technology through a business combination in the ever expanding digital infrastructure space.”

The InfraTech fund said it will “focus on target companies with an enterprise value of $1 billion or more” in the technology, media and telecom infrastructure sector. But the initial acquisition could be just a first step towards larger M&A ambitions.

“We intend to seek companies that can serve as a platform for future synergistic acquisitions,” InterPrivate says in its SEC filing. “We will actively seek opportunities to combine businesses that can expedite each other’s growth, either through complimentary technology offerings or through geographic scale, as well as businesses that offer the potential to expand services to underserved markets, geographies, and/or demographics.”

More SPACs Means More M&A

SPACs can provide a quick route to the public securities markets for privately-held companies in the digital infrastructure sector. This has been the case in two data center M&A deals:

• Vertiv went public in early 2020 when it was acquired by GS Acquisition Holdings, a SPAC created by Goldman Sachs and executive David Cote.
• Cyxtera was acquired this month by a SPAC controlled by investor Starboard Value in a deal that values Cyxtera at $3.4 billion,

The formation of multiple SPACs appears likely to boost the number of publicly-held companies focused on digital infrastructure. Increased data center M&A was one of the trends DCF highlighted in our annual forecast, Eight Trends That Will Shape the Data Center Industry in 2021.

InterPrivate believes it has lined up a team with the experience and connections will make the InfraTech fund an attractive partner. “We believe that our team’s extensive experience in designing, building, operating, and automating some of the world’s largest digital infrastructures will make us the partner of choice for companies looking to capitalize on this opportunity,” the company said.

Timmons has designed, built, and operated some of the world’s largest technology infrastructures. He led Microsoft’s global data center team as General Manager of Data Center Services, refining the company’s data center network, introducing a lightweight modular data center design. At CyrusOne, he led a “massively modular” design that helped the company win hyperscale deals. Timmons was also employee number four for GeoCities in 1996, serving as Director of Operations for the early web site platform.

Other team members include:

• Chairman Ahmed Fattouh is the founder and CEO of InterPrivate, and has 25 years of experience in private equity and corporate M&A.
• President Dave Withers is an experienced executive and investor for software, cloud and SaaS companies. He was CEO and co-founder of Renesar Technologies, a software company which was acquired by EMC, and held executive roles at Nebula, Isilon and APC.
• Peter Gross is a director and co-founder of InfraTech, and has held leadership roles at Bloom Energy and HP, and was co-founder and CEO of EYP Mission Critical Facilities, a pioneer in data center design.
• Director and co-founder Gary Wojtaszek was the CEO of CyrusOne, a larger data center REIT, and led the company through its spinoff from Cincinnati Bell and IPO.
• Director and co-founder James Eisenstein was a co-founder of American Tower Corporation, now the world’s largest telecom tower operator, and has lengthy experience in the tower and antenna sector.
• Director Michael Person co-founded IT security company Barracuda Networks, and was an early pioneer in the commercial ISP sector.