Liquid-Cooled Data Center Operator Colovore Acquired by King Street

DateMay 21, 2024

King Street Capital Management, a global investment firm, has acquired a majority ownership stake in Colovore, a Silicon Valley-based data center operator specializing in liquid-cooled, high-density colocation for artificial intelligence (AI) and high-performance computing (HPC). Financial terms of the deal were not disclosed.

This strategic transaction is set to leverage King Street’s extensive real estate expertise to propel Colovore’s growth in response to the escalating demand for advanced colocation center solutions. The existing management team at Colovore will continue to lead the company through its expansion phase.

Brian Higgins, Co-Founder and Managing Partner of King Street, emphasized the strategic fit between the two companies. “Next-generation chips and power-dense platforms supporting AI and HPC applications are outpacing the capabilities of traditional air-cooled colocation data centers. Colovore is exceptionally positioned to address the needs of these high-density customers with its exclusive focus on liquid-cooled data centers. With over a decade of successful operations supporting AI and HPC industry leaders, we are excited to collaborate with Colovore’s management team and support the company’s next growth phase.”

Mark Van Zandt, Co-Head of Real Estate at King Street, highlighted the firm’s investment approach. “Our data center investment platform extends King Street’s thematic approach to global real estate investing. By working closely with our colleagues in technology and energy sectors, we offer a comprehensive and unique perspective on the data center industry. We look forward to partnering with Colovore to seize this rapidly evolving investment opportunity.”

Scalable Power and Cooling Densities

“Our colocation data centers are designed from the ground up with robust liquid cooling systems to provide the most scalable power and cooling densities,” said Sean Holzknecht, President and Co-Founder of Colovore.Founded in 2012, Colovore is a provider of liquid-cooled, high power density colocation services. The company’s solutions are designed to support next-generation compute and AI infrastructure at scale, catering to a diverse customer base that includes Fortune 500 enterprises and Silicon Valley startups.

Colovore, with its locations in Santa Clara, California, and Nevada, is set to expand into additional ‘Tier 1’ markets across the United States under King Street’s sponsorship. This expansion aims to cater to the increasing demands of modern, dense compute environments driven by AI and HPC workloads.

Sean Holzknecht, President and Co-Founder of Colovore, reflected on the company’s journey and future plans. “Since 2012, our focus has been on meeting the rigorous and growing demands of dense compute infrastructures. Our colocation data centers are designed from the ground up with robust liquid cooling systems to provide the most scalable power and cooling densities. This approach optimizes our customers’ deployments, reduces total cost of ownership, and ensures easy scalability. We are eager to work with King Street to rapidly expand our footprint and meet the larger and more complex needs arising from the surge in AI-driven workloads.”

Peter Harrison, Chief Technology Officer and Co-Founder of Colovore, added insights into the company’s mission. “We established Colovore to enable engineers from Fortune 500 companies to startups to drive successive waves of innovation in compute-intensive and AI-oriented services. Our partnership with King Street will extend our platform to numerous additional markets, and together we will continue to revolutionize the data center industry, fostering the growth of emerging technologies and applications.”

$25+ Billion in Assets

The advisory roles in this transaction were handled by DH Capital, a division of Citizens, serving as the exclusive financial advisor to Colovore, and Kirkland & Ellis LLP acting as legal advisor to King Street.

King Street Capital Management, founded in 1995, manages over $25 billion in assets across public and private markets. The firm is known for its rigorous fundamental research combined with tactical trading and unique sourcing capabilities, identifying complex and often misunderstood investment opportunities across various asset classes and capital structures. King Street’s real estate investments are characterized by an opportunistic strategy focused on special situations and high conviction themes.

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