I Squared Capital Acquires 10 Data Centers from Cogent for $225M, Plans New US Operator
May 27, 2026
I Squared Capital Acquires 10 Data Centers from Cogent for $225M, Plans New US Operator
Global investment firm I Squared Capital has agreed to acquire a portfolio of ten data center facilities from fiber provider Cogent Communications for $225 million in cash, marking a significant step in the consolidation and repurposing of legacy telecommunications infrastructure for modern AI workloads. The deal, expected to close in the third quarter of 2026, will seed a new US-based data center operating platform focused on colocation, high-density deployments, and AI inference infrastructure.
The portfolio includes approximately 53 megawatts of installed power capacity and roughly 259,000 square feet of available colocation space across nine US markets: Chicago, Atlanta, Phoenix, Los Angeles, Kansas City, Baltimore, Houston, Nashville, and Stockton, California. All ten facilities are purpose-built data centers owned fee simple, with room for expansion and the capability to support higher-density configurations, including liquid-cooling-enabled setups. I Squared Capital has committed up to $1 billion to build the new platform through targeted capital investment, customer-led expansion, and additional acquisitions.
Gautam Bhandari, co-founder, managing partner, and global chief investment officer at I Squared Capital, said the transaction aligns with the firm’s disciplined approach to building infrastructure platforms from the ground up. “Location, power, and connectivity are the three variables that determine a data center’s long-term value, and these facilities have all three in markets where new supply is severely constrained,” Bhandari said. “As AI moves from the training phase to the inference phase, demand for high-density, low-latency facilities like these will only grow.”
The deal marks a major milestone in Cogent’s broader effort to repurpose and monetize dozens of former Sprint fiber switching sites acquired from T-Mobile in 2022 for just $1. Cogent had converted more than 100 of those sites into colocation facilities, a project completed earlier this year. The company later pivoted to a wholesale strategy, planning to sell or lease its 24 largest facilities while retaining small portions for its own network needs. As of its most recent earnings, Cogent operated 185 data centers and edge facilities totaling over 2.1 million square feet, 40,954 racks, and 211 megawatts of power.
Cogent CEO Dave Schaeffer revealed earlier this month that the company had entered into a non-binding letter of intent to sell ten of the converted Sprint sites, with the deal expected to close in early summer. He noted that the letter did not include the company’s largest or smallest facilities and that multiple other parties remain interested in additional former Sprint data centers. “We continue to have multiple parties interested in other former Sprint data centers,” Schaeffer said, adding that some are conducting due diligence on single facilities while others are exploring multi-site acquisitions.
Industry observers note that I Squared’s new venture will likely require substantial upgrade work to make the acquired sites suitable for AI inferencing. According to an engineering report reviewed by Data Center Dynamics, some facilities may need major refurbishment, including removal of obsolete equipment such as distribution equipment, PDUs, busways, and legacy cooling systems. Additional power and cooling infrastructure may need to be installed in parking lots. The report also indicated that previously unutilized utility power at some sites may be lower than initially assumed, potentially limiting expansion at certain locations.
I Squared Capital, founded in 2012 and managing $60 billion in assets, has a track record of investing in digital infrastructure, including European data center firm nLighten, Asia-Pacific operator BDx, fiber firms Exa and Lightstorm, and thousands of cell tower sites. The firm also acquired Mexican data center operator Kio in 2021 and Brazilian operator Elea earlier this year. TVG Consulting Group served as commercial and market advisor on the deal, with Kirkland & Ellis LLP providing legal counsel and FTI Consulting acting as carve-out and stand-up advisor.
Source: datacenterdynamics
