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Friday, Apr 12, 2024
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St. Louis Firms Buy Controlling Interest of DDC

TECHNOLOGY: Investment Capital to Scale Up Manufacturing

SAN DIEGO – Controlling interest of local high-tech data cooling system maker DDC Cabinet Technology has been acquired by St. Louis private investment firm Cequel III and private equity leader Thompson Street Capital Partners for an undisclosed amount.

Jerry Kent
CEO & Chairman
Cequel III

“For DDC, this majority investment brings new capital into the business, which will be used to scale up operations, expand manufacturing capabilities, and grow our teams across various disciplines while promoting the benefits of the DDC platforms across the global data center market,” DDC Co-Founder and Chief Strategy Officer Chris Orlando wrote to the Business Journal. He declined to share the financial terms of the deal but wrote in part, “While DDC already has a small number of customers worldwide, this investment will expand our reach globally to help ALL data centers adapt and prepare for the stark increases in power density driven by AI and similar computationally intense workloads.” Worldwide data center event locations this year include Spain, Germany, London, Singapore, and Brazil.

Chris Orlando
Co-Founder, Chief Strategy Officer, Board Member
DDC

“DDC Cabinet Technology offers truly exceptional, best-in-class cooling management solutions, and we’re seeing the demand for this equipment increase significantly with the rapid proliferation of AI and machine learning,” said Cequel III Chairman and CEO Jerry Kent. “Our investor group is understandably excited about DDC’s prospects. The company is uniquely positioned to serve the data center operators, software developers, and cloud service providers that are powering the future of artificial intelligence.”

‘Explosive Increase in Demand’

Kearny Mesa-based DDC designs and manufactures cabinet and enclosure technology to enable the deployment of any hardware, at any density. In 2018, the company spun out of ScaleMetrix, a local cloud and data protection business that also focuses on so-called colocation — rented space that house servers and other computing hardware. “While COVID slowed the company’s ability to evangelize and ship products to prospective customers, the explosive growth of AI and the subsequent exponential demand for high-density data center space to support it has created a significant increase in customer inquiries and new deals being signed,” added Orlando. “Revenues were primarily sales to ScaleMatrix before 2023. By opening the sale of our products to the market this year we have seen an explosive increase in demand and expect to see 10x growth in 2024.”

ScaleMatrix’s data centers use DDC’s technology exclusively to support high-profile customers like Qualcomm, Bumblebee Foods and Cox Communication.
Under the terms of the new deal with Cequel III and Thompson Street Capital Partners, Orlando will continue his role as DDC’s Co-Founder and Chief Strategy Officer and Minority Director on the Board, while long-time DDC partner and customer Keith Markley will assume the role of CEO. Markley comes from one of DDC’s client companies – TierPoint – where he served as Executive Vice President, Data Center Operations. Mark Ortenzi will transition from his role as DDC’s CEO to a new role as Co-Founder and Chief Innovation Officer in charge of product development.

The company confirmed that no immediate staffing changes were being made following the transition but shared that the company does plan to expand operations in areas like sales, project management and engineering. The headquarters will remain in San Diego for the time being.

Within the next five years, DDC hopes to be serving the data center community at large and around the globe. “In addition, the company is currently exploring ways to integrate both air and liquid cooling so that DDC can deliver a true one-stop-shop solution, where both liquid and air cooling can be run efficiently and safely together, creating a Swiss army knife for solving any data center demand, in a single, composable form factor that is both reliable and efficient. In short, the five-year outlook looks pretty bright,” added Orlando.

DDC Cabinet Technology
FOUNDED: 2010 as ScaleMatrix before spinning out in 2018 as DDC
CSO & CO-FOUNDER, BOARD MEMBER: Chris Orlando
HEADQUARTERS: Kearny Mesa
EMPLOYEES: 30+
BUSINESS: data center design and cooling
VALUATION: undisclosed
WEBSITE: ddc-cabtech.com
CONTACT: info@ddc-cabtech.com or 888-349-9994
NOTABLE: Mission Critical magazine previously named DDC a winner of the Top Tier Products Awards for its S-Series cabinet solution.

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