Dive Brief:
- Nucor Corporation, the largest U.S. producer of steel and steel products, has purchased Southwest Data Products for $115 million. SWDP, which manufactures and installs data center infrastructure, will be housed under a newly launched division, Nucor Data Systems.
- The acquisition includes SWDP’s offices and manufacturing facility in San Bernardino, California, as well as some 147 employees, per a news release. Nucor said the data center division will provide its Warehouse Systems business with expanded airflow containment structure capabilities.
- "This acquisition will give us new capabilities to serve a rapidly growing market and will bolster Nucor as a preferred supplier to many of the nation's largest and most innovative hyperscale cloud and colocation data center operators," Chad Utermark, executive vice president of new markets and innovation at Nucor, said in the release.
Dive Insight:
Nucor’s Warehouse Systems arm produces custom-designed racks, cabinets, enclosures and caging for data centers, warehouses and other industrial buildings. There are a number of synergies between SDWP and Nucor’s core steelmaking business, the release said, noting that Nucor can provide sheet steel, steel tubing, wire mesh and other raw materials. These can be used by newly minted Nucor Data Systems.
An increased use of artificial intelligence, video streaming and cloud-based services has fueled the growth of data centers, Nucor said in the release, echoing a trend highlighted in a recent JLL report, which cites expectations that consumers and businesses will generate twice as much data in the next five years as was created over the past decade.
A strong demand for data center space last year pushed companies toward secondary and other emerging markets, amid a limited supply of power and land. Existing data centers are undergoing expansion to meet that demand, upgrading their infrastructure and on-site power generation.
SWDP’s product lineup includes data center cabinets and racks, airflow containment, pathway support structures and data center cages.
Racks and airflow containment are of particular interest to data center operators. Increases in rack density — the amount of computing equipment installed and operated in a single server rack — are driving up the need for cooling to offset the amount of heat the equipment generates. Less than half of the data center professionals who responded to a recent AFCOM survey said their current cooling solutions meet all their requirements, and 58% said they are focused primarily on improving airflow.
"The SWDP acquisition furthers our expand beyond strategy to invest in steel centric businesses that operate outside of the cyclical nature of steel production,” Utermark said in the release.
