This is the first post in our annual IT services mergers and acquisition (M&A) series, we will also be covering telecom/network and cloud acquisitions in later posts. If you happened to miss last year’s data center M&A post, here is a link to it for old times’ sake.
Spending on data center mergers and acquisitions in 2016 hit a record high. However, 2017 was no joke either with over $10 billion in acquisitions in the first 6 months. According to real estate research firm CBRE, as of October, companies and funds have invested over $18.2 billion — double the value of 2016 and on track to surpass the total for the three previous years combined.
Here’s a few of the more notable acquisitions in the data center world from 2017:
CyrusOne Adds Some European Depth, Buys Zenium - CyrusOne announced a definitive agreement to acquire Zenium Data Centers in a deal that significantly expands the company's presence in Europe. Zenium brings four properties to the table, two they own in Frankfurt and two with long term leases in London.
Rackspace Acquires Datapipe as it Looks to Expand its Managed Services Business - Rackspace recently announced its acquisition of Datapipe, one of its largest competitors in the managed public and private cloud services business. The two privately held companies did not disclose the financial details of the transaction, but Datapipe has raised more than $310 million in equity funding since its launch in 1998 and this deal surely didn’t come cheap. Datapipe’s majority owner, Abry Partners, will become an equity investor in Rackspace and the combined company will have more than 6,700 employees and do more than $2.4 billion in annual revenue.
CenturyLink Completes Sale of its Data Center Business, Now Called Cyxtera - CenturyLink finalized the sale of its data center and colocation business to a consortium led by BC Partners and including Medina Capital Advisors and Longview Asset Management. The business has been combined with Medina Capital’s security and data analytics businesses - including Cryptzone, Catbird, Easy Solutions and Brainspace.
Peak 10 Acquires ViaWest for $1.7B, Scales Reach Into Multiple Markets - Peak 10, a portfolio company of GI Partners, acquired ViaWest from Shaw, creating a large data center provider with access to over 20 domestic and international markets. By having this greater scale, Peak 10 can more effectively challenge not only larger traditional colocation providers like Equinix, but also traditional telcos like CenturyLink and Verizon, which have sold off their colocation facilities.
Digital Realty Sells Austin Data Center to Tenant vXchnge for $20M - vXchnge has acquired an Austin data center it has been occupying as a tenant from Digital Realty Trust. The acquisition price was $20 million, according to a person familiar with the transaction. Digital Realty also acquired DuPont Fabros in a $7.8B deal. The DuPont Fabros portfolio of 12 data centers concentrated in Northern Virginia, Chicago and Silicon Valley, is now a wholly owned subsidiary of Digital Realty.
Equinix Closes $3.6B Verizon Data Center Acquisition - this acquisition expanded the data center portfolio of the world’s largest retail colocation provider by 29 facilities in 15 metro areas in North America and South America, including facilities in Miami and Culpeper, Virginia. Equinix also acquired IO UK's Data Center Business in Slough, United Kingdom. The facility, which will be renamed LD10, is near Equinix's existing Slough data center campus and will help meet growing demand for digital infrastructure connectivity in the United Kingdom and Europe. Last but not least, Equinix augments its Australian presence by purchasing Metronode.
CyrusOne Picks Up Two More Data Centers For $490M From Competitor Sentinel - CyrusOne purchased two of Sentinel's East Coast-based data centers, one located in the Raleigh-Durham area of North Carolina and the other in Somerset, New Jersey. The deal will help CyrusOne establish a presence in the Southeast, while also assist the provider in reaching more business customers in the healthcare and financial verticals.
QTS Buys Large Dallas Data Center from Insurer HCSC - QTS Realty Trust has acquired a Dallas data center campus from the insurer Health Care Services Corp. for about $50 million, expanding its capacity in what is expected to be one of the hottest data center market in the US this year. Power capacity of the 260,000 square foot data center on the property is 8 MW, but more important is room to grow at the site, which can ultimately handle more than 300,000 square feet of data center space and 60 MW of power.
Iron Mountain Makes $1.3 Billion Data Center Acquisition – the document storage company purchased the U.S. operations of IO Data Centers for about $1.32 billion, giving it access to the lucrative colocation data center services business. Under the deal, Iron Mountain will acquire the land and buildings associated with four data centers in Phoenix and Scottsdale, Arizona; Edison, New Jersey; and Columbus, Ohio. Iron Mountain also acquired FORTRUST for $128 million, adding 9 megawatts (MW) of existing data center capacity and expansion space for an additional 7 MW within FORTRUST’s 210,000 square foot facility in Denver.
Green House Data Acquires Cloud Provider Ajubeo - Green House Data, provider of data center services primarily in tier 2 US data center markets, has acquired Ajubeo, a privately held provider of cloud infrastructure services hosted in two secondary US markets and two markets in Germany. Green House only plans to keep the Denver footprint, as it currently has a data center in the Denver area, so this deal expands its presence in that market. Green House Data also acquired Cirracore, an Atlanta-based provider of Infrastructure-as-a-Service (IaaS) and hybrid cloud products.
DataBank Acquires Managed Cloud Firm Edge Hosting - DataBank, a data center provider owned by investor Digital Bridge, has made another acquisition. This time, it has bought Edge Hosting, a managed cloud hosting company with a focus on compliance services. Since becoming part of Digital Bridge in July of 2016, DataBank has acquired C7 Data Centers and individual data center properties in numerous secondary markets around the US, including facilities formerly owned by 365 Data Centers and Stream Data Centers. It’s also began construction of a data center in Atlanta, where it signed the Georgia Institute of Technology as the anchor tenant.
As the data center marketplace continues to change, we look forward to seeing where things stand next December. Stay tuned for our next M&A recap post – Telecom/Network.
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