Digital Realty Acquires Colocation Provider Telx For $1.886 Billion

Digital Realty (NYSE: DLR), a global provider of data center and colocation solutions, and Telx, a national provider of data center colocation, interconnection and cloud enablement solutions, have entered into a definitive agreement under which Digital Realty will acquire Telx from private equity firms ABRY Partners and Berkshire Partners in a transaction valued at $1.886 billion.

The combination is expected to double Digital Realty’s footprint in the rapidly-growing colocation business, as well as provide Digital Realty customers access to a leading interconnection platform.

telx-data-centersTelx’s extensive interconnection ecosystem enables the exchange of information between communications service providers, enterprises, content providers and other entities with low latency and diverse connectivity across a global network and is expected to provide Digital Realty an opportunity for future growth.

The transaction is expected to close later in the year and is subject to customary closing conditions.

Twenty Data Centers

As of March 31, 2015, Telx managed 1.3 million square feet of data center space operating out of 20 facilities across the Unites States, of which two are Telx-owned, 11 are leased from Digital Realty, one is partially sub-leased from Digital Realty and an unrelated third party, and six are leased from third parties.

“This transformative transaction is consistent with our strategy of sourcing strategic and complementary assets to strengthen and diversify Digital Realty‘s data center portfolio and expand our product mix and presence in the attractive colocation and interconnection space,” said A. William Stein, Digital Realty’s Chief Executive Officer. “Telx’s well-established colocation and interconnection businesses provide access to two rapidly-growing segments with long-standing customer relationships in top-tier metropolitan areas such as New York and Silicon Valley. The fact that more than half of Telx’s 20 facilities are run out of Digital Realty properties further highlights the strategic fit as well as the potential incremental revenue opportunities we expect to be able to pursue as one company on a global basis.”

Furlow consulting