Grand Rapids-based data centre solutions provider, Service Express, has been acquired by global private equity firm Warburg Pincus, in a deal that sees the business transition from one New York City-based private equity firm to another.
Harvest Partners LP, who initially invested in Service Express in 2019, has sold the company to Warburg Pincus, a global investor managing over £67 billion in assets and boasting a diverse portfolio of over 225 companies.
The investment aims to support Service Express' ongoing expansion, including geographical reach, market initiatives, and strategic acquisitions, as stated in a press release from Warburg Pincus.
Doug Musicaro, managing director at Warburg Pincus, highlighted the appeal of Service Express, stating, "We focus on businesses offering differentiated and value-added solutions, well-positioned to address evolving industry needs. Service Express aligns perfectly with our portfolio as a scaled, leading data centre services platform within the burgeoning market for mission-critical aftermarket services."
Service Express specialises in maintaining data centre equipment for a diverse clientele, including Fortune 500 companies, hospitals, manufacturers, universities, banks, government agencies, and other medium to large organisations worldwide.
The company's growth journey has involved both organic expansion and strategic acquisitions, resulting in a comprehensive suite of hybrid cloud solutions for data centre infrastructure.
Ron Alvesteffer, CEO of Service Express, who remains at the helm under Warburg Pincus ownership, expressed his enthusiasm about the partnership, stating, âWe are thrilled to partner with Warburg Pincus as we aim to accelerate our business growth and meet the increasing demands of our customer base, while upholding the industry-leading service standards we are renowned for. Our growth to date reflects the commitment, hard work, and dedication of our workforce and is a testament to the company culture we have cultivated."
While the financial terms of the transaction remain undisclosed, William Blair and J.P. Morgan acted as financial advisors, with Kirkland & Ellis LLP serving as legal counsel for Harvest Partners and Service Express. Citi provided financial advisory services to Warburg Pincus, while Cleary Gottlieb Steen & Hamilton acted as their legal advisors.
Globally, data centres have witnessed a surge in private equity investments in recent years, particularly driven by the rise of artificial intelligence, which analysts view as a "gold rush" to capitalise on the growing demand for computing power.
"Cloud computing has been the driving force behind data centre demand for a decade as businesses and other enterprises shifted to off-premise data storage and processing," reported analysts at S&P Global in December.
The firm further noted that private equity firms have stepped in to fill the gap left by public companies who are either unable or unwilling to invest the billions of pounds required to support the growth of AI.
S&P Global tracked a significant number of private equity-backed deals for data centres between 2019 and 2023, totalling over £43 billion across approximately 331 transactions.
