DPW Holdings’ Subsidiary Enters into an Agreement to Acquire a 617,000 Square Foot Michigan Mixed-Use Facility with Maximum Power Capacity of 300MW which Is Being Converted to a Cloud Data Center Offering Multi-Megawatt Hyperscale Requirements
Summary
The buildout of the initial 30,000 square feet will be for colocation services, including build-to-suit arrangements, in which customers will be provided with secure, reliable and robust environments for hardware and access to network connectivity that are necessary to aggregate and distribute information. The Facility features several strategic and operational advantages: • It currently operates with a positive net operating income from its existing commercial real estate customers; • It provides immediate access to notable power of approximately 28MWs, anticipated to be upgraded to 190MWs over the next 18 to 24 months with the option to reach a maximum capacity of approximately 300MWs, as necessary; • It features direct access to power from a local provider under a perennial energy abatement agreement with guaranteed pricing at relatively low energy rates for the next 5 years; • It has an on-premise natural gas system capable of producing approximately 12MWs; • It is located within 100 to 2,500 feet of major internet loops and fiber optics which enables the Enterprise Cloud Data Center to offer customers a wide choice of service providers; • It will feature a hyperscale enterprise cloud data center targeted to be 200,000 square feet over the next 3 to 5 years; and • At 50% capacity, the Facility is expected to generate annual gross revenues between approximately $54 million and $64 million. Darren Magot, the CEO of Ault Alliance, Inc., said, “The acquisition of the Facility, and particularly its incremental expansion, in terms of both square footage and service offerings provides an opportunity to rapidly enter the data center business with limited risk as the initial offerings will be centered more on colocation services, which significantly reduces our overall capital needs.” Mr. Magot continued, “We see a clear opportunity to enter a large addressable market. In the second quarter of 2020, total global data center infrastructure equipment revenues, including both cloud and non-cloud, hardware and software, were $41.4 billion, according to Synergy Research Group. We do not expect to incur these computing related infrastructure costs at the outset of this program because by initially only offering colocation services we will not be required to deploy servers and other equipment.