Morgan Stanley Infrastructure Partners invested an undisclosed amount in Charlotte-based Flexential, a data center company with operations in 19 markets. The transaction gives the company co-control with San Francisco-based private-equity group GI Partners, which has been a key investor in Flexential and its predecessor ViaWest since 2014.
The deal is expected to close later this year, pending regulatory approval.
“We believe Flexential’s robust next-generation infrastructure, commitment to innovation, and proven leadership in the industry make it well-positioned to capitalize on market opportunities,” Christopher Ortega, head of Americas for the Morgan Stanley business, said in a release.
Flexential has a portfolio of more than 40 data centers across the United States and more than 325 megawatts of capacity, including projects under development. CEO Chris Downie said the new investment will aid Flexential’s growth and market presence.
The companies didn’t disclose Flexential’s enterprise value or revenue, but Downie noted that the company reported a 15% revenue increase and a 28% gain in pre-tax operating profit last year.
The company hasn’t entered new markets over the past three years, but has expanded existing sites in Atlanta, Denver, and Hillsboro, Oregon.
Flexential was formed by the merger between Charlotte-based Peak 10 and Denver-based ViaWest in 2017. It doesn’t disclose its annual revenue.
Like other data center operators, Flexential says artificial-intelligence-related demand is spurring its growth. The Morgan Stanley investment helps it “meet the rising needs for comprehensive digital transformation services, including cloud adoption and AI workload management,” the company said.
Demand by data centers is prompting Duke Energy and other electric utilities to ramp up their generating capacity. Asked about the state’s energy market, Downie said it “remains competitive from a national perspective, and that’s important for attracting and retaining key industries, including the data center sector. While some manufacturers may express concerns about specific energy rates, the state’s energy mix, regulatory environment, and infrastructure investment make it a reliable location for business.”
Morgan Stanley’s infrastructure unit has investments in a big French data center company and fiber operators in New York, Portugal and Germany.
