In 2019, the number of data center-oriented M&A deals closed passed the 100 mark for the first time, says Synergy Research. This was up 6% from 2018 and more than double the data center M&A deals closed in 2016. The number of billion-dollar deals declined in 2018 though, and again in 2019.
Since the beginning of 2015, Synergy Research has identified 348 closed data center M&A deals with an aggregated value of $75 billion. Over the 5-year period the aggregated deal value has been split roughly equally between public companies and private equity buyers, while private equity buyers have accounted for 57% of the deal volume.
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“The aggressive growth of cloud services and outsourcing trends more generally are fueling a drive for scale and geographic reach among data center operators, which in turn is stimulating data center M&A activities,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “This has been attracting an ever-increasing level of private equity activity as investors seek to benefit from high-value and strategically important data center assets. It is also notable that even the biggest publicly traded data center operators are increasingly turning to joint ventures with external investors to help fund growth and protect balance sheets.”
Digital Realty, Equinix, Iron Mountain, CyrusOne
Since 2015, the largest data center M&A deals being closed are the acquisition of DuPont Fabros by Digital Realty, the Equinix acquisition of Verizon’s data centers and the Equinix acquisition of Telecity.
Over the 2015-2019 period, by far the largest investors have been Digital Realty and Equinix, the world’s two leading colocation data center providers. In aggregate, they account for 31% of total deal value over the period. Digital Realty also has a pending deal to acquire Interxion, in what would be the largest ever data center transaction.
According to Synergy Research, other notable data center operators who have been serial acquirers include CyrusOne, Iron Mountain, Digital Bridge/DataBank, NTT, GI Partners, Carter Validus, GDS, QTS and Keppel.