Thompson Street Capital Partners (TSCP) and Cequel III have acquired a controlling interest in privately held DDC Cabinet Technology.
DDC Cabinet is a designer and manufacturer of data center cabinet and cooling systems. The company’s scalable and ruggedized enclosures use the company’s patented dynamic density control (DDC) systems to provide cost-effective cooling options for high-density graphics processing unit (GPU) clusters that are required to run artificial intelligence and other compute-intensive applications.
In practice, DDC technology uses sensors and monitoring tools to gather data on temperature, humidity, power consumption, and workload. Using this real-time data, the system adjusts the allocation of power and cooling to different areas or racks within the data center to ensure that equipment operates within acceptable temperature ranges and power budgets. This optimization leads to increased energy efficiency, reduced operating costs, and improved reliability in the data center.
Co-founders Chris Orlando and Mark Ortenzi, who launched the DDC Cabinet business in 2011, will continue as minority investors in partnership with TSCP and Cequel III.
“The market for providing cooling infrastructure to high power density, AI-based computing environments is experiencing explosive growth, and DDC Cabinet’s proprietary solution is well positioned to be a dominant technology provider within the category,” said Tom St. Geme, a director at TSCP. “This is an exciting time to be part of DDC Cabinet’s continued plans for expansion.”
With the close of this transaction and beginning February 5th, Keith Markley will become the chief executive officer of DDC Cabinet. Mr. Markley is a 30-year veteran of the telecommunications and data center sectors and previously served as Executive Vice President, Data Center Operations at TierPoint, a St. Louis headquartered provider of data center colocation, internet connectivity, managed services, cloud services and disaster recovery services. TierPoint is a major customer of DDC Cabinet and both Cequel III and Thompson Street are investors in TierPoint.
Messrs. Orlando and Ortenzi, the DDC Cabinet co-founders, will report to Mr. Markley and will be active with the company’s strategy and product innovation efforts.
Cequel III is a St. Louis-based investment firm and family office that was founded in 2002 by Jerry Kent, the chairman and CEO of TierPoint, and Howard Wood. The firm invests from $5 million to $50 million in North America-based companies that have EBITDA from $2 million to $10 million. Sectors of interest include business services, information technology, telecommunications, media, software as a service, real estate, and healthcare.
“We’re thrilled to once again invest alongside Jerry Kent and the team at Cequel III to provide the growth capital that will enable DDC Cabinet to scale into a leader within this highly attractive market,” said Jim Cooper, the managing partner at TSCP. “DDC Cabinet is well positioned to continue taking advantage of opportunities for growth in what is clearly a significant moment for AI.”
St. Louis-based TSCP makes equity investments of $50 million to $250 million in companies with EBITDA between $5 million and $50 million. Sectors of interest include healthcare and life science services, software and technology services, and business and consumer products and services.
DH Capital, a division of Citizens JMP Securities, was the financial advisor to DDC Cabinet on this transaction.
© 2024 Private Equity Professional | February 2, 2024
