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The former Daugherty Hardware building at Sixth Avenue East and Fourth Street is now an Essentia building that houses an Involta data center. (2013 file / News Tribune)

New investors sustain Involta’s plans for growth

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business Duluth, 55802
Duluth News Tribune
(218) 723-5295 customer support
Duluth Minnesota 424 W. First St. 55802

Iowa-based Involta has been on the fast track for several years, building critical data storage centers mostly in the Midwest.

Its seven centers include two in Duluth.

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But as Involta’s chief financial officer explains it, that growth — which landed the firm at No. 40 on the 2010 Inc. 500 list of fastest-growing private companies in the United States  — couldn’t be sustained without a major investor.

“We just spent the last five years expanding into several new markets,” Jeff Quint said. “In order for us to expand at that continued pace, we need to get that significant equity partner.”

They did.

Enter M/C Partners of Boston, a private equity firm, and Morgan Stanley Alternative Investment Partners. Each kicked in about $25 million for a total $50 million equity investment in Involta, Quint said.

The investment is the largest the company has ever received, he said.

“It certainly is a milestone,” CEO Bruce Lehrman said. “It really allows us to continue to move at the same pace we have, to take advantage of the position in the market we are now in.”

The investment can be leveraged to get additional bank financing that will fuel Involta’s growth to new markets or expand in its existing markets.

“We have a number of opportunities that we haven’t announced yet that we are working on,” Lehrman said. “We’re also working on acquisition targets.”

 Since building its first cutting-edge, highly secure data center in Cedar Rapids, Iowa, in 2004, the company has built data centers in Marion, Iowa; Akron, Ohio; Tucson, Ariz.; Boise, Idaho; and Duluth. The Duluth centers are its only locations in Minnesota.

In Duluth, an $11.5 million, 24,000-square-foot center was built on 14 acres near Arrowhead and Rice Lake roads in 2012. A $2.3 million satellite data center also was created for Essentia Health in a former warehouse Essentia owns at Sixth Avenue East and Fourth Street.

Lehrman said Involta’s operations in Duluth are going well.

“We’re continuing to add new customers all the time, expanding the managed services we do in the area,” Lehrman said. “We’re feeling very good about Duluth.”

The main Duluth data center was built with two 5,000-square-foot halls for data storage. The first hall is nearing capacity. Build-out of the second hall should happen in the next year, Lehrman said.

When the second hall reaches capacity, plans are to build another 24,000-square-foot data center next to the first one.

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Candace Renalls
(218) 723-5329
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