Data Center M&A Scorecard: The Deals That Are Shaping the Cloud

As 2017 draws to a close, it has been a landmark year for consolidation in the data center industry. The June 9 megamerger between Digital Realty and DuPont Fabros Technology is the largest in a flurry of deals that are likely to make it the most active year ever for data center M&A. There were at least six acquisitions of companies or portfolios that broke the $1 billion barrier.

What’s driving the M&A boom? Cloud infrastructure has been a star performer on Wall Street, attracting interest from new investors. This has created opportunity for providers in growth mode, who are expanding their geographic footprint and service offerings. Investor interest has also created opportunity for established companies seeking an exit opportunity.

Here’s a recap of the deals in 2017, which include corporate acquisitions  as well as purchases of data center facilities.

December

CyrusOne Buys Zenium Data Centers: Wholesale provider CyrusOne will enter the European market with its $442 million acquisition of Zenium Data Centers, which operates facilities in London and Frankfurt. Zenium was owned by Quantum Strategic Partners, part of Soros Fund Management.

Equinix Buys Metronode to Expand Australian Presence: Equinix has agreed to pay $792 million US ($1.04 Billion AUS) to acquire Australian data center specialist Metronode, which operates 10 facilities. The deal reinforces Equinix’ presence in Sydney and Melbourne, and adds new markets in Perth, Canberra, Adelaide and Brisbane. See additional coverage from Computerworld.

Iron Mountain Acquires IO Data Centers for $1.3 Billion: Iron Mountain continues its busy year of M&A with a deal for IO Data Centers, which adds data centers in four cities and at least 728,000 square feet of space and 62 megawatts (MW) of capacity.

Serverfarm Purchases Atlanta Area Facility: Serverfarm (Server Farm Realty) has acquired a 153,000 square foot data center in Suwanee, Georgia from an enterprise operator through a sale-leaseback.

Agile Buys Maryland Data Center: Hybrid cloud, data and network solutions company Agile has acquired the primary data center of media and marketing giant Gannett. The data center in Silver Spring, Maryland, features 21,000 square feet of raised floor.

November

Peak 10+ViaWest Acquires Philadelphia Data Center: Peak 10 + ViaWest is continuing to expand, pushing into the Northeast with the acquisition of a 203,000 square foot data center in Collegeville, Pa. from pharmaceutical giant GlaxoSmithKline plc, along with 25 acres of property.

Green House Data Buys Ajubeo: Cheyenne-based colocation and cloud specialist Green House Data added Denver operations with its deal for Ajubeo, which focuses on hybrid cloud deployments.

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October

Mapletree Acquires 14 Properties from Carter Validus: Carter Validus has agreed to sell a 14-property portfolio to an affiliate of Mapletree Investments and Mapletree Industrial Trust (MIT), a Singapore Exchange listed Real Estate Investment Trust, for approximately $750 million.

Digital Realty Buys Ascent Chicago Project: Digital Realty will buy a data center  in Northlake, Illinois  from owner Carter Validus Mission Critical REIT for $315 million. The data center was built by Ascent Corp., which operates it as a multi-tenant wholesale data center and colocation facility.

vXchange Buys Austin Data Center: Regional colo provider vXchnge has acquired an Austin data center it has been occupying as a tenant from Digital Realty Trust. The acquisition price was $20 million.

Iron Mountain Acquires Credit Suisse Data Centers:  Iron Mountain will acquire two Credit Suisse data centers in London and Singapore in a $100 million sale/leaseback transaction, with Credit Suisse signing a long-term lease to maintain their existing data center operations.

365 Data Centers Acquires Host.Net: Regional specialist 365 Data Centers has acquired its Florida-based competitor Host.net, along with two facilities totaling 62,000 square feet. The acquisition is the first for 365 under its new ownership team led by Chirisa Investments, Lumerity Capital and Longboat Advisors.

September

DataBank Buys Edge Hosting: DataBank, which is owned by Digital Bridge, has bought Edge Hosting, a managed cloud hosting company with a focus on compliance services. Edge CEO Vlad Friedman has been named DataBank’s CTO.

Rackspace Acquires Datapipe: In a cloud-driven deal, Rackspace announced plans to acquire 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. Datapipe operates 29 data centers in nine countries.

Evocative Buys ColoNet Solutions Sites: Evocative said it has acquired two downtown Los Angeles based data centers from ColoNet Solutions and executed a long-term lease with Rising Realty Partners at West 7 Center (previously known as the Garland Center). These facilities add 42,000 square feet and 2.5 megawatts of capacity, with significant expansion space available if needed.

July

Iron Mountain Acquires FORTRUST: On July 28, Iron Mountain expanded its network with its first data center acquisition, paying $128 million to buy Denver-based FORTUST and its 210,000 square foot facility, with has 9 megawatts of leased space and 7 MW of expansion capacity.

Carter Validus Buys Data Centers in Sunnyvale, Cincinnati: Carter Validus continus its acquisitive ways, paying $36.8 million for a 76,500 square foot fully-leased facility in Sunnyvale, and buying a three-story, 58,000 SF data center in Cincinnati for $10.3 million. The Cincinnati site is 100% leased by a “global investment-grade technology company.”

June

Peak 10 Buys ViaWest From Shaw Communications: Peak 10 acquired ViaWest from parent company Shaw Communications in a $1.675 billion all-cash transaction announced June 13. The deal brings together two experienced regional players to create a national data center network covering 20 markets from coast to coast. Charlotte-based Peak 10 provides colocation and managed services in the Southeast, while ViaWest has built a network of data centers on the West coast.

Digital Realty Acquires DuPont Fabros Technology: In a blockbuster deal announced June 9, Digital Realty will acquire one of its oldest and largest rivals, DuPont Fabros Technology (DFT), in a $7.6 billion transaction that will boost its ability to serve the fast-growing hyperscale market. The merger creates a cloud colossus with 26 million square feet of data center space, and provides the new Digital Realty with clear leadership in the two hottest markets: Northern Virginia and Chicago.

May

Carter Validus Purchases Charlotte Data Center: On May 25, Carter Validus Mission Critical REIT spent $16.4 to acquire a data center in Charlotte, N.C. The facility is fully leased to an IT provider, and is about 60,000 square feet. Carter Validus is a non-traded REIT that focuses on the data center and healthcare sectors, often buying fully leased properties and keeping the tenant in place.

Carter Validus Buys Connecticut Data Center: Just days earlier, Carter Validus announced the purchase of a 75,000 square foot data center in Norwalk, Ct. from Fortis Property Group for about $58.9 million on May 17. The property is fully-leased to CyrusOne, which acquired initial tenant Cervalis.

Cyxtera Takes Over CenturyLink Data Centers: On May 2, Medina Capital and BC Partners closed their previously announced deal to acquire CenturyLink’s data center portfolio. The $2.8 billion deal created Cyxtera, a new provider with 57 data centers in the U.S., Europe and Asia,  spanning more than 2.6 million square feet of mission-critical space. Cyxtera’s leadership team includes many alumni of Terremark, which CEO Manuel Medina founded and grew into a leading player in cloud computing before it was acquired by Verizon in 2011.

April

Green House Data Expands With Cirracore Acquisition: Colocation and cloud hosting provider Green House Data continued to build its national footprint with the April 27 acquisition of Cirracore, an Atlanta-based infrastructure provider of Infrastructure-as-a-Service (IaaS) and hybrid cloud products. The deal brings Green House Data a strong presence in the Southeast, including a presence inside two Equinix facilities in Atlanta.

Investor Group Acquires 365 Data Centers: On April 26, 365 Data Centers said it is being acquired by a group of investors including Chirisa Investments, Lumerity Capital and Longboat Advisors. The deal includes eight data centers with a strong base of carrier and content customers, including facilities in Buffalo, Chicago, Detroit, Indianapolis, Nashville, Philadelphia, New York and Tampa.

March

Vantage Data Centers Bought by Digital Bridge: Santa Clara-based wholesale specialist Vantage Data Centers was acquired by a consortium of investors led by Digital Bridge Holdings, which sees the purchase as the first step in a larger expansion into the wholesale data center industry. Digital Bridge has partnered with Canada’s PSP Investments and TIAA Investments, while the seller was the private equity firm Silver Lake, which created Vantage in 2010. The deal was announced on March 27.

February

Equinix Acquires IO London Data Center: Equinix is acquiring UK’s data center operating business in Slough, the company said on Feb. 10. The facility, which will be renamed LD10, is just around the corner from Equinix’s existing data center campus in Slough, a major data center hub about 20 miles west of London.

CyrusOne Acquires Sentinel Facilities:  On Feb. 6, wholesale specialist CyrusOne expanded into the Southeastern U.S. with the purchase of two facilities from Sentinel Data Centers. The $490 million transaction includes large facilities in Raleigh, North Carolina and Somerset, New Jersey which both have room for expansion.

Stonepeak Infrastructure Buys Cologix: Colocation provider Cologix was acquired by private equity firm Stonepeak Infrastructure Partners in a Feb. 3 deal highlighting investor interest in interconnection services in regional markets. Stonepeak says it is investing $500 million to accelerate the growth of the Cologix platform, which is focused on second-tier cities and includes a presence in leading markets in Canada.

January

H5 Acquires Cleveland Data Center From ByteGrid: Denver-based H5 Data Centers acquired the Cleveland Technology Center in downtown Cleveland, Ohio. The 333,215 square foot data center was previously owned by ByteGrid, whose employees working at the site will join H5. ByteGrid and H5 pursue a similar strategy, seeking opportunistic deals for buildings with existing tenants and an “upside” of space for development.

DataBank Buys Cleveland, Pittsburgh Sites from 365: What’s up with Cleveland? In the month’s second deal in the Ohio city, Digital Bridge Holdings’ DataBank unit acquired data centers in Cleveland and Pittsburgh from 365 Data Centers. Digital Bridge has raised over $6.3 billion of debt and equity capital used to acquire and invest in the development of communications infrastructure businesses. The deal came just 11 days after DataBank’s most recent acquisition …

DataBank Buys C7 Data Centers: On Jan. 17 DataBank acquired C7 Data Centers, which has built a niche as the leading colocation provider in Salt Lake City. C7’s three interconnected data centers in the Utah market  become DataBank’s first footprint in western US.  It’s possible that DataBank owner Digital Bridge is just getting started, as it is reported to be working on a deal to acquire Vantage Data Centers

Redbird Capital Invests in Compass: Private equity firm Redbird Capital and the Ontario Teachers Pension Fund are the new investment team, with Compass founder and CEO Chris Crosby and the management team retaining an equity stake and continuing to head the company’s operations. Redbird is also an investor in Tierpoint, which like Compass has focused on building data centers in secondary markets across the U.S. Compass recently began building a data center for Tierpoint in Dallas. Just two weeks after the investment, TierPoint announced that Compass would build a $20 million expansion at its Nashville campus, where Compass built the first data center for Windstream (which was subsequently acquired by TierPoint).

QTS Acquires Dallas Dallas Data Center: As we’ve previously noted, QTS Realty has become the master of the Internet-scale retrofit, finding former industrial facilities with sturdy infrastructure and transforming them into massive data centers. It has applied this template to an expansion of its Dallas footprint, investing $50 million to buy a 260,000 square foot data center in Fort Worth from insurer Health Care Services Corp. The existing building has 8 megawatts of power, but the property can accommodate another 60 MW of capacity.

Central Colo Enters Northern Virginia Market: The colocation provider acquired the Tyson Technology Center in Vienna, with an affiliate buying the building from the Meridian Group for $96 million. The property consists of a 200,000-square foot Tier 3 data center and an 80,000-square foot office building, and is 75 percent leased. The acquisition comes just four months after Central Colo unveiled new expansion-minded investors in Safanad Capital, a global investment firm, and San Francisco private equity firm Industry Capital.

Carter Validus Buys NaviSite Boston Site: Carter Validus paid $37 million to acquire a 153,000 square foot facility in Andover, Mass. , which is fully occupied by managed hosting provider NaviSite. The deal aligns with the Carter Validus strategy of acquiring leased data centers and healthcare facilities.

Peak 10 Buys Louisville Data Center: Peak 10 was an early player in the second-tier data center market, building out a network of colocation facilities in the Southeastern U.S.  Under new CEO Chris Downie, who previously led Telx, Peak 10 appears to be entering a new phase of deal-driven growth to build upon its strength in regional markets. On Jan. 9 the company bought a 33,000 square foot facility that doubled its footprint in Louisville.