Data Center M&A Activity Hit New Heights in 2017

Deal making surrounding the data center market reached a lofty $20 billion in 2017, finds Synergy Research Group.

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2017 was a landmark year in IT for many reasons, but for many data center operators, it also meant big changes in ownership.

Last year, the total deal volume of data center mergers and acquisitions (M&A) reached $20 billion, according to Synergy Research Group's latest analysis of the market. It's a figure that surpasses the total deal volume of 2015 and 2016 combined.

In 2017, data center owners paid vast sums to grow their footprints, observed John Dinsdale, chief analyst and research director at Synergy Research Group.

"The largest transaction in the year was Digital Realty's $7.6 billion acquisition of DuPont Fabros, but there were four other deals that were valued at a billion dollars or more, involving acquisitions by Equinix, Cyxtera, Peak 10 and Digital Bridge," said Dinsdale. "There were another twelve deals that were valued in the $100 million to $1 billion range, and 31 smaller deals that were each valued at up to $100 million."

All told, 48 deals were completed in 2017. The previous two years (2015 and 2016) saw 45 deals close between them, 17 deals in 2015 and 28 deals in 2016. The largest of those was Equinix's acquisition of TelecityGroup for $3.8 billion in 2016, noted to the analyst firm.

TelecityGroup's 40-plus data centers helped Equinix more than double its capacity in Europe. It also helped the firm land some major new clients.

"Through the acquisition, Telecity brings more than 1,000 net new customers to Equinix, including more than 200 network and mobility companies and more than 300 cloud and IT services companies," stated Equinix in a Jan. 15, 2016 announcement. "This further strengthens the business ecosystems found inside of Equinix International Business Exchange IBX data centers and provides customers with the broadest choice of service providers for IT and multi-cloud deployments to accelerate business performance."

During the three-year period between 2015 and the end of 2017, Digital Realty and Equinix have collectively spent $19 billion snapping up other data center operators.

Digital Reality has primarily focused its efforts on the U.S. and Europe. Equinix appears to have more global ambitions, having inked deals in the world's four major regions. Other acquirers of note include Carter Validus, CyrusOne, Cyxtera, Digital Bridge, Elegant Jubilee, Iron Mountain, NTT and Peak 10.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.




Tags: data center, merger and acquisition


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