Switch IPO values data centres group at $4.2 billion

Las Vegas-based Switch Inc raised about $531.3 million in its initial public offering (IPO) yesterday, after pricing its shares at $17, valuing the company at about $4.2 billion. The Switch IPO came after streaming device maker recently Roku (NASDAQ:ROKU) recently raised about $219 million.

Reuters reported yesterday that Switch, which designs, constructs and operates data centres, had offered 31.3 million Class A shares at $17 yesterday, above its proposed guidance of between $14 and $16 per share. According to Bloomberg data, the Switch IPO was the third-biggest tech offering in the US this year, behind Snap Inc’s $3.9 billion float and Altice’s $2.2-billion listing.

Switch, which was incorporated in June for the purpose of issuing the Class A shares in the listing, plans to use the proceeds to buy out investors in Switch Ltd and take control of it as a holding company. MarketWatch meanwhile noted in its coverage of the news that the group’s multi-class share structure will allow founder and Chief Executive Rob Roy to maintain control, as his shares will have 10 times the voting rights of common shares. Renaissance Capital, however, recently noted that some investors may be turned off by insider dividends and its dual-class structure. 

According to its initial filing with the US Securities and Exchange Commission, the company has been profitable for at least the past four years. Switch is scheduled to start trading later today on the New York Stock Exchange under the ticker symbol SWCH.

The US IPO calendar also includes Chinese online credit products provider iQiyi is also thought to be targeting a listing in the US.