Dave Schaeffer, CEO of Cogent, said during the company’s first-quarter earnings call that its initial mission was to sell the first 10 data centers and then move on to the remaining 14.

“We have tried to focus our data center resources on getting this initial 10 centers over the finish line,” he said. “And then for the remaining 14, we will hopefully be in a position to work more expeditiously to get some of those deals moving along, but we've really tried to keep resources focused on getting this deal closed.”

A broader divestiture effort

Cogent’s sale of 10 data centers to Squared Capital is part of a broader effort to sell the data centers it acquired from the Sprint Wireline deal in 2023.

As of the end of the first quarter, Cogent was providing services in 1,744 carrier-neutral data centers and 185 of Its Own data centers. This data center footprint represents approximately 17 gigawatts of installed power. Cogent’s data centers have approximately 211 megawatts of installed power and approximately 1.2 million square feet of floor space.

The company plans to monetize 24 of its Sprint data centers, either by selling them or by leasing the acquired space on a wholesale basis.

Schaeffer said it is in talks with other potential suitors to sell other Sprint data centers

“We continue to have multiple parties interested in other former Sprint data centers,” he said. “We also have several other parties conducting due diligence on multiple other data centers.”

A new data center platform

For I Squared Capital, the Cogent acquisition will seed a new U.S. data center operating platform focused on colocation, high-density deployments, and AI inference infrastructure.

I Squared has committed up to $1 billion to build the platform through targeted capital investment, customer-led expansion, and additional acquisitions.

The initial portfolio of data centers comprises about 53 megawatts (MWs) of installed power capacity and approximately 259,000 square feet of available colocation space across nine U.S. markets: Chicago, Atlanta, Phoenix, Los Angeles, Kansas City, Baltimore, Houston, Nashville and Stockton. Together, these nine markets serve a combined population of over 63 million people.

What’s compelling about this portfolio is that it can accommodate future growth. All ten facilities are purpose-built data centers owned fee simple and have room for expansion. In addition, these facilities can support higher-density deployments, including liquid-cooling-enabled configurations.

Gautam Bhandari, Co-Founder, Managing Partner and Global Chief Investment Officer, I Squared Capital, said Cogent’s data facilities, which it purchased, represent an opportunity to be a new option in markets where options had previously been limited.   

“Location, power, and connectivity are the three variables that determine a data center’s long-term value, and these facilities have all three in markets where new supply is severely constrained,” he said. “As AI moves from the training phase — where models are built — to the inference phase, where they are used by people and businesses every day, demand for high-density, low-latency facilities like these will only grow.”

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