LAS VEGAS, Aug. 5, 2021 /PRNewswire/ -- Switch, Inc. (NYSE: SWCH) ("Switch") today announced shareholder value initiatives to support its industry-leading technology and visionary infrastructure strategy. These initiatives include the evaluation of a REIT election and review of Switch's operational and financial targets. Elliott Investment Management L.P. ("Elliott"), whose funds are collectively the largest Class A investor with an 11% economic interest in such class, has collaborated with Switch on these initiatives and will join the Board of Directors.
"With our recently announced expansion into a Fifth Prime campus in Texas, 1.3 million additional square feet to open between now and early 2023 and an additional 1.9 million square feet in the development pipeline through 2026, Switch's strategic position has never been stronger," said Switch Founder and CEO Rob Roy. "The combination of the world's most advanced data center infrastructure, significant expansion capacity and industry-leading ROIC provide a compelling foundation for continued strategic leadership and financial performance. The initiatives announced today, including the evaluation of a REIT election, are an important step forward to fully realize the value inherent in Switch's technology and Tier 5 data centers."
"We are strong believers in the vision of Rob Roy and his team. Switch's unique design philosophy and exascale data centers place the Company in a leading position to support the most mission-critical applications for many of the largest global enterprise and cloud customers," said Elliott Managing Partner Jesse Cohn and Portfolio Manager Jason Genrich. "Despite best-in-class operational metrics, including renewable energy sourcing and power efficiency, Switch remains undervalued. We look forward to working with Switch on these initiatives to compound long-term value for shareholders."
New Director to Switch Board
In support of these shareholder initiatives and as a continuation of Switch's evolution as a public company, Switch intends to add Jason Genrich of Elliott to the Board of Directors, subject to Switch's standard governance processes for Board appointments. Consistent with its policy and approach to corporate governance, Switch conducts ongoing reviews of its Directors and evaluates the necessary skills, qualifications, experiences and diversity of background to ensure Switch's success for all of its stakeholders.
Switch announced today that the REIT Committee of the Board is undertaking an evaluation process of a REIT election and will also evaluate Switch's capital allocation plan, capital structure and a multi-year financial plan to be discussed at the upcoming Investor Day. The mandate for the committee is to target a financial profile that accelerates Switch's long-term value creation and provides the necessary flexibility to invest in its strategy. The committee will be comprised of four directors, including Kimberly Sheehy as Chair, Bryan Wolf, Liane Pelletier, and Jason Genrich (upon being added to the Board of Directors).
Evaluation Process of REIT Election
Switch has initiated a formal evaluation process of a REIT election with the assistance of financial, legal, and tax advisors. The evaluation will include a comprehensive review of the feasibility of a REIT election, including various implications on its tax position and dividend requirement. There can be no assurance that the evaluation will result in a change in Switch's tax filing status.
Switch, Inc. (NYSE: SWCH), is the independent leader in exascale data center ecosystems, edge data center designs, industry-leading telecommunications solutions and next-generation technology innovation. Switch Founder and CEO Rob Roy has developed more than 750 issued and pending patent claims covering data center designs that have manifested into the company's world-renowned data centers and technology solutions.
This press release contains forward-looking statements within the meaning of federal securities laws. Forward-looking statements in this press release include, but are not limited to, statements regarding future development and data center campus capacity, initiatives and tax filing status. The forward-looking statements in this press release are based on information available to Switch as of the date hereof, and Switch disclaims any obligation to update any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. For additional information regarding forward-looking statements, please refer to discussions under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operation" and elsewhere in our most recent Annual Report on Form 10-K and in our other reports filed with the Securities and Exchange Commission ("SEC"). Switch's SEC filings are available on the Investor Relations section of our website at investors.switch.com and on the SEC's website at www.sec.gov.