Colovore, a liquid-cooled data center operator in California, has been acquired.
Investment firm King Street Capital Management this week announced it has acquired a majority ownership stake in the Silicon Valley colocation provider.
Terms of the transaction were not disclosed. The existing management team of Colovore will remain in place.
King Street said the transaction will leverage the investment firm’s ‘deep real estate platform’ to support Colovore's growth to meet demand for liquid-cooled data centers.
"The next-generation chips and power-dense platforms that support AI and other high-performance computing applications are quickly overwhelming legacy, air-cooled data centers," said Brian Higgins, co-founder and managing partner of King Street. "Colovore is uniquely positioned to meet the needs of these high-density customers, with a business focused exclusively on liquid-cooled data centers and over a decade of successful operating history supporting many of the leaders in the AI and HPC industries. We are thrilled to partner with the management team of Colovore and support this next phase of the company's evolution."
Launched in 2013, Colovore carved out an early niche for liquid-cooled racks capable of up to 35kW. The company launched its original single-story, 24,000 sq ft (2,230 sqm) facility at 1101 Space Park Drive in Santa Clara in 2014, with the last 2MW expansion announced in February 2022.
The company announced plans to build a second, 9MW facility known as SJC02, on a neighboring plot in November 2022. The facility is set to launch later this year.
King Street says that Colovore also has a location in Nevada, though there’s no mention of a third facility on the company’s website.
The investment firm said Colovore plans to “quickly scale into additional Tier 1 markets” across the US under King Street's sponsorship.
Digital Realty Trust and Silicon Valley real estate development firm Pelio & Associates were previous investors in Colovore, alongside a number of private investors. It’s unclear if any of those parties retain a stake in the company.
Update:
Digital Realty has since confirmed it liquidated its 17 percent interest in Colovore. The move generated gross proceeds of approximately $35 million; a gain of approximately $27 million on its original investments, made in 2015 and 2017.
If a 17 percent sale generated $35 million, that suggests Colovore was sold for around $205 million.
Original story resumes:
Sean Holzknecht, president and co-founder of Colovore, said: "Since 2012, we've been singularly focused on supporting the demanding and ever-increasing needs of modern, dense compute. We build our data centers from the ground up with robust liquid cooling to provide the most scalable power and cooling densities in our industry to optimize our customers' deployments, reduce their TCO, and ensure easy scalability. We look forward to working closely with our new partner King Street to quickly expand our data center footprint and support larger and more demanding customer needs created by the explosion in AI-driven workloads."
Cerebras, Lambda Cloud, and Cirrascale, amongst others, are known customers of Colovore. Today the firm says it can support densities up to 250kW per rack via rear door heat exchangers or direct liquid cooling.
DH Capital, a division of Citizens, served as the exclusive financial advisor to Colovore. Kirkland & Ellis LLP served as legal advisor to King Street.
King Street is a global alternative investment firm founded in 1995 that manages more than $25 billion in assets across public and private markets.
