DataBank, a data center operator founded 20 years ago, has experienced significant growth due to the AI boom, expanding to over 65 facilities. Despite this success, CEO Raul Martynek states the company has no plans to go public, citing three key reasons:

  1. Financing Structure: DataBank utilizes asset-backed securitization, allowing higher leverage than public REIT investors might accept.
  2. Growth vs. Cash Flow: Public markets’ focus on free cash flow could hinder DataBank’s expansion plans.
  3. Private Secondary Markets: These provide liquidity alternatives for investors and employees without the need for an IPO.

Additional challenges include:

  • Labor Bottlenecks: There is a Shortage of specialized workers like electricians and mechanical engineers.
  • Trump’s Tariffs: Potential impact on construction material prices and supply chains.

Martynek believes that while a data center operator may eventually go public, it would likely be a “bad decision” given these factors.

Source: Axios

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