I Squared backs Saragon data center launch with $1B

I Squared Capital is backing Saragon, a new U.S. data center company seeded with ten facilities across a nine-market footprint, with $1 billion, according to IREI, a commitment that leaves most of the capital unspent after the seed acquisition. The platform opens with 53 megawatts of installed power across Atlanta, Baltimore, Chicago, Houston, Kansas City, Mo., Los Angeles, Nashville, Phoenix and Stockton, Calif., a combined population of more than 63 million, and is built for colocation, high-density computing and AI inference infrastructure.

I Squared acquired the portfolio from Cogent Fiber, a Cogent Communications subsidiary, for $225 million in cash — about $22.5 million a site — with each facility combining high-density power, liquid cooling and dense multi-carrier fiber in metro markets where new data center supply is increasingly constrained, a profile built for latency-sensitive workloads.

Steve Orlando, who spent nearly six years as CEO of the operator of Seabras-1, the Brazil-U.S. subsea cable system at Seaborn Networks, becomes CEO of Saragon as the platform shifts from acquisition to operations, and Kevin Dalton, the new president, brings more than 30 years of data center development experience.

The structure is an infill wager, not a greenfield land grab. At $225 million, the base purchase accounts for less than a quarter of the $1 billion commitment, and the launch materials cite significant room for expansion — a gap that implies the balance is growth capital. Saragon is buying existing, connected shells in nine markets where the schedule and price of power now determine what gets built, matching this publication's argument that the energization calendar has replaced the acreage map.

The test is the cost per incremental megawatt as Saragon densifies: if it lands below a greenfield build, the seed purchase was a bargain; if not, the $1 billion has bought the portfolio at full price with expansion costs still ahead.