Data center provider TierPoint has raised $320 million from a consortium of investors, led by 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, are also participating.

After transaction fees and expenses, the funds will be used to repay TierPoint's second-lien credit facility, reduce its outstanding balance under the company's revolving credit facility, and provide growth capital, the company said.

TierPoint Tulsa
TierPoint in Tulsa – TierPoint

Challenging times

"This investment agreement was reached in what we all know is a very challenging environment," TierPoint CEO and chairman Jerry Kent said. "Our business has tremendous momentum. In the last two years, we've increased sales bookings by 26 percent and the first quarter of 2020 will be another outstanding growth period."

Last year, the company was rumored to be seeking an investment of $250m to $500m to expand its presence in markets like Kansas, Nebraska, Missouri, and Oklahoma. The company primarily focuses on markets that are not traditional Internet hubs, with the majority of its 40 facilities found in second-tier locales including Oklahoma, Arkansas, and Tennessee - although it also operates data centers in New York, Texas, and Washington.

The company has expanded through a mixture of new builds and acquisitions, including Colo4, Perimeter Technology Center, Adhost Internet Advertising, Baltimore Technology Park, Philadelphia Technology Park, Xand, CxP Data Centers, Altered Scale, Windstream Hosted Solutions, and Cosentry.

"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," Fawaz Al-Mubaraki, CEO of investment firm Wafra, said.

Citi and DH Capital served as financial advisors to TierPoint in the transaction and Goldman Sachs advised RedBird Capital.