Over the past 15 years, Charlotte-based data center company Peak 10 has grown from two facilities to 26 in 10 mostly Southeastern markets, with plans to expand across the Mississippi.
The company gained new private equity owners last year, but could one day go public, says CEO and co-founder David Jones. For now, though, Peak 10 is focused on expanding the company’s footprint and becoming more efficient, he says.
“It could be an exit strategy that we’ll look at down the road,” Jones says of a possible initial public offering. “It’s not necessarily the goal that’s the most important thing for us.”
Jones’ company, which employs about 160 in Charlotte, operates data centers where corporate customers can place their own equipment or use cloud computing or other IT services provided by Peak 10. The data centers have air conditioning systems that keep equipment cooled and back-up generators in case of power outages.
In a recent interview at one of Peak 10’s four Charlotte data centers, Jones discussed the company’s growth, efforts to become more green and the arrival of Google Fiber in Charlotte. Questions and answers were edited for clarity and brevity.
Q What are your growth plans for this year?
A One of the best ways for us to grow is organic. We are opening a brand-new facility in Tampa. We will be adding capacity in Raleigh, and we’ll start construction on a new 75,000-square-foot building in Nashville later in the year. So a lot of capital going into expanding growth in the markets where we are in. We constantly look at mergers and acquisitions. We are looking at markets west of the Mississippi now, probably making some decisions on that when we get to the mid-year timeframe. We’re investing a lot right now in our back office and automating a lot of systems and processes to give the customers more flexibility and engagement.
Q Last year, private-equity firm GI partners acquired Peak 10 from another private-equity firm, Welsh, Carson, Anderson & Stowe. What has that meant to the company?
A GI closed that deal in May and it was the third private equity partnership I’ve had an opportunity to manage. They are very familiar with this space. From a strategy standpoint, now I have some partners that have visibility into the market and the space. They have embraced our need to automate more of what we do and have also offered help with resources. Ownership-wise, it didn’t really change much. The company is really owned by GI and five of us on the management team.
Q Do you see another sale in the future?
A Private equity tends to earmark that they will exit their investments in three to five years. Of course, with Seaport Capital, our first private equity firm, they were in for 10 years. Then Welsh Carson was in for about three. So it’s hard to say. I don’t worry about that because if we continue to grow and we operate the company efficiently, the right things will happen for us. GI has not given any indication they are looking at a three-year exit or a five-year exit. They are looking to grow this company and invest more capital in our growth.
Q Data centers use a lot of power. What can you do to be more green?
A One thing we do with cooling in data centers is use ambient air where we have certain environments. So when the temperature drops to a certain level we can draw that outside air through a separate system and not have to run that chiller as much, which saves power. Believe me, anything we can do to be green we will do because what it does is reduce our energy costs.
Q What does Google Fiber’s decision to come to Charlotte mean for the city and Peak 10?
A It’s a great thing for Charlotte. What it will do is increase the competition for bandwidth. Once we can create an environment where we have a high-capacity market, it attracts more businesses, it attracts more entrepreneurs which is close to my heart, and greater capabilities. For Peak 10, generally every network provider in Charlotte has a pathway through our data centers. So ultimately you would think Google would be looking to put fiber into our data centers. We’ll see if that happens or not. But it’s a huge opportunity for Charlotte as a whole.
States where Peak 10 has data centers
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About Peak 10
▪ CEO: David Jones.
▪ Headquarters: Charlotte.
▪ Start: Founded in 2000 by Jones and Nick Kottyan.
▪ Ownership: Private equity firm GI Partners acquired the company in 2014. Five members of management also own a stake. The deal valued Peak 10 at between $800 million and $900 million, according to Reuters.
▪ Revenue: Does not disclose.
▪ Clients: about 2,500, including the Florida Panthers hockey team, technology company Red Hat and Gorilla Glue.
▪ Employees: 400 (163 in Charlotte).