CyrusOne Inc. (NASDAQ:CONE) has closed the previously announced acquisition of Cervalis, a privately-held operator of four data center facilities and two work area recovery facilities serving the New York metropolitan area. The transaction expands CyrusOne’s existing portfolio to 31 data centers across 12 distinct markets (10 cities in the U.S., London and Singapore).
Pursuant to the terms of the transaction, a subsidiary of CyrusOne acquired Cervalis for approximately $400 million, excluding transaction-related expenses, in an all cash transaction.
“We are excited about welcoming Cervalis into the CyrusOne family, as Mike Boccardi and his team have created the premier financial services data center platform in the New York Metro area,” said Gary Wojtaszek, president and chief executive officer of CyrusOne. “Cervalis is highly complementary to our existing business, strengthening our geographic footprint by establishing a presence in a very important East Coast market and providing an attractive portfolio of enterprise customers, including some of the largest financial services companies in the world.”
The transaction adds four Tier 3+ data center facilities and two standalone work area recovery facilities serving the New York metropolitan region into CyrusOne’s existing data center platform. The Cervalis facilities currently comprise more than 500,000 gross square feet of space, including more than 130,000 colocation square feet and over 100,000 square feet of work area recovery space.
In fiscal year 2014 and the first quarter of 2015, Cervalis generated revenue of $69 million and $20 million, respectively, with approximately two-thirds being derived from colocation services, and the remainder from interconnection, managed services, and work area recovery products. As of the end of the first quarter of 2015, 78% of the colocation square feet within the Cervalis facilities was utilized. In addition to the currently available raised floor space, it currently has capacity under shell to deliver an incremental 50,000 colocation square feet.
Cervalis serves approximately 220 enterprise customers, with a particular niche servicing some of the world’s largest financial institutions, including several Fortune 1000 companies. Approximately two-thirds of its first quarter 2015 revenue came from customers within the financial services industry.