US digital infrastructure company Z Squared has signed a binding letter of intent to acquire a majority membership interest in Paradox Data and its Union County Campus data centre site in El Dorado, Arkansas.
Paradox specialises in high-density, immersion-cooled computing for data-intensive workloads.
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The planned transaction will see Z Squared increase its presence in AI infrastructure.
Paradox’s data centre site features on-grid utility power and high-density immersion cooling systems, elements that Z Squared sees as vital at a time when power access and cooling are critical issues for AI and high-performance computing.
Z Squared CEO David Halabu said: “Energised power and high-density immersion cooling are two of the scarcest and most valuable assets in AI infrastructure today, and this transaction would add both, anchored by a campus engineered for firm, large-scale power.
“Paradox represents exactly the kind of asset that advances our strategy. As we build this company site by site, Paradox is a prime representation of the opportunities we are seeking.”
Under the deal, sellers are set to receive newly created Series D Convertible Preferred Stock with an aggregate initial liquidation preference of $5m, with no cash or debt financing involved.
On completion, Z Squared would become majority member in Paradox Data, which will continue operating.
The agreement covers Paradox’s technology and intellectual property, about 10 acres of land, and an existing 8MW of energised capacity. There is a milestone structure to pursue a further utility interconnection request for up to 50MW.
The Union County Campus currently provides an 8MW grid connection and is zoned for industrial use.
Z Squared intends to combine this with behind-the-meter natural gas generation using industrial turbines to supply up to 150MW of continuous firm power. The site also offers access to fibre networks and rail infrastructure.
Closing is subject to negotiation of final terms, due diligence, necessary approvals, and other customary conditions. There is no assurance the transaction will complete on the described terms or timeframe.
