• About Us
  • Partnership Opportunities
  • Privacy Policy

Data Center Frontier

Charting the future of data centers and cloud computing.

  • Cloud
    • Hyperscale
  • Colo
    • Site Selection
    • Interconnection
  • Energy
    • Sustainability
  • Cooling
  • Technology
    • Internet of Things
    • AI & Machine Learning
    • Edge Computing
    • Virtual Reality
    • Autonomous Cars
    • 5G Wireless
    • Satellites
  • Design
    • Servers
    • Storage
    • Network
  • Voices
  • Podcast
  • White Papers
  • Resources
    • COVID-19
    • Events
    • Newsletter
    • Companies
    • Data Center 101
  • Jobs
You are here: Home / Podcast / The $10 Billion Dollar Data Center Deal

The $10 Billion Dollar Data Center Deal

By Rich Miller - June 9, 2021

The $10 Billion Dollar Data Center Deal

LinkedinTwitterFacebookSubscribe
Mail

The Blackstone acquisition of QTS Realty for $10 billion is the biggest deal ever for the data center industry. We highlighted the potential for these type of huge M&A deals in DCF’s 2021 forecast, noting the massive investor interest in funding the growth of digital infrastructure. With so many players, it amplifies the role of FOMO – the Fear of Missing Out. Here’s some thought on the Blackstone-QTS deal, what it means for data center M&A, and what comes next.

Listen to today’s show:

Here are some resources that tie into our discussion:

  • Blackstone to Acquire QTS in Blockbuster Data Center Deal: Blackstone Infrastructure Partners will acquire QTS Realty Trust for $78 a share, valuing QTS at approximately $10 billion, the two companies said today. QTS operates more than 7 million square feet of data centers across North America and Europe.
  • Data Center M&A on the Horizon as New SPACs Go Shopping: More data center mergers and acquisitions (M&A) appear likely amid reports of two new special purpose acquisition corporations (SPACs) featuring teams of data center executives. Meanwhile, the industry’s busiest consolidator is raising a huge new round of capital.
  • Pandemic Could Drive Data Center M&A, Reshaping Industry Landscape: Economic disruptions are times of both peril and opportunity. We look at how the COVID-19 pandemic may impact the active world of data center mergers & acquisitions. Financial strength will drive the action.

Be sure to check our our free Annual Forecast, outlining the DCF take on the most important trends to watch this year:

  •  The Eight Trends That Will Shape the Data Center Industry in 2021

Did you like this episode? Be sure to subscribe to the Data Center Frontier show so you get future episodes on your app. We are on Apple Podcasts, Spotify or wherever you find quality podcasts. You can also subscribe using our RSS feed, and tell your friends and colleagues about our podcast!

We’ve also just launched the Data Center Frontier Channel on YouTube to showcase our videos, where we explain the infrastructure that powers the digital world. If you like data centers or work in the industry, you’ll want to subscribe!

Transcript: The $10 Billion Data Center Deal

Hey everyone! We have officially entered the era of the $10 billion data center deal. Let’s talk about what that means for the industry and for data center M&A going forward. Of course I’m talking about Monday’s acquisition of QTS Rrealty by Blackstone Infrastructure, which was priced at $10 billion dollars in its valuation of the QTS operation. That makes it the richest data center deal of all time, surpassing the previous leaders, which were both acquisitions by Digital Realty, which bought Interxion for $8.4 billion dollars back in 2019 and prior to that spent $7.8 billion dollars to purchase DuPont Fabros Technology in 2017.

Who saw this coming? Well it was one of the things that we talked about at Data Center Frontier in our 2021 forecast, which we call Eight Trends to Shape the Data Center Industry. We noted that there is a good likelihood of a lot of large data center M&A deals, including perhaps some outsized ones like we saw with the Blackstone acquisition of QTS.

What made us expect this? It all has to do with a phenomenon known as FOMO – the fear of missing out. There’s a large number of global investors who want to put money to work in the data center industry, but there’s a limited number of platforms available companies that have the scale and breadth to give a financial company an immediate presence in the data center industry As the data center consolidation has proceeded, it’s left fewer and fewer of these significant data center platforms available for acquisition, leaving would-be acquirers the option of building greenfield data centers, stitching together portfolios or single data centers into a platform, or making a big move and trying to acquire an existing player with a substantial presence.

The QTS Data Centers Shellhorn DC-1 project in Ashburn. (Image: QTS)

The QTS Data Centers Shellhorn DC-1 project in Ashburn. (Image: QTS)

That, of course, is what we’ve seen with Blackstone and QTS. QTS has more than 7 million square feet of data center space across North America and Europe and thus is a both a pretty big bite financially but also a big way to get into the industry. This deal highlights some of what’s been changing in data center M&A. We typically have a couple of kinds of buyers – they could include strategic buyers who are companies operating in the space, who want to expand geographically or add new capabilities or different kinds of lines of business. Then you have financial buyers, which includes these global investors that have been flooding into the industry.

As deals have gotten more expensive and valuations have grown, it’s made it a little harder for the private equity players and strategic players to compete. So what do things look like going forward? An interesting wrinkle in the QTS deal is that there is a “go shop” provision that allows them to field offers from other suitors for another 40 days. Could there be a higher bid for QTS? The bar has been set really high with that $10 billion dollar valuation.

Could QTS play a strategic role in another provider’s operations and plans going forward? Might one of these large global investors feel like they have to to have the opportunity to get into the market and see paying more for QTS as an option? Stay tuned as we continue to watch this drama.

And look for more large acquisitions in the data center sector, which is reflected in the Wall Street trading on Monday, as the shares of companies like CyrusOne and Coresite were bid up by about 6 percent as folks on on Wall Street wondered whether we might see additional acquisitions, perhaps with financial players coming in and buying some of these remaining firms and taking them private.

What’s coming next? It’s too early to say, but we’ll be keeping an eye on all of the happenings in the industry at Data Center Frontier. If you want to stay informed,  subscribe to our newsletter which will share all of our latest headlines and insights with you, and follow us on LinkedIn.

LinkedinTwitterFacebookSubscribe
Mail

Tagged With: Blackstone, QTS Realty

Newsletters

Stay informed: Get our weekly updates!

Are you a new reader? Follow Data Center Frontier on Twitter or Facebook.

About Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter

Voices of the Industry

Mitigate Risk, Improve Performance and Decrease Operating Expenses through Data Center Self-Performance

Mitigate Risk, Improve Performance and Decrease Operating Expenses through Data Center Self-Performance If a vendor conducts the actual work in your data center, then you or your operator aren’t maximizing your current operating resources and are experiencing incremental cost and risk. Chad Giddings of BCS Data Center Operations, explains the importance of your data center provider having a high-degree of self-performance.

White Papers

hybrid cloud

Hybrid Cloud

It’s not a matter of choosing or favoring either data center, cloud, or colocation, but selecting the most appropriate tool for the application, workload and desired outcome. A new special report from NTT explores why enterprises are building the most effective ecosystem for their needs by mixing and matching data center, cloud, and colocation.

Get this PDF emailed to you.

We always respect your privacy and we never sell or rent our list to third parties. By downloading this White Paper you are agreeing to our terms of service. You can opt out at any time.

DCF Spotlight

Data center modules on display at the recent Edge Congress conference in Austin, Texas. (Photo: Rich Miller)

Edge Computing is Poised to Remake the Data Center Landscape

Data center leaders are investing in edge computing and edge solutions and actively looking at new ways to deploy edge capacity to support evolving business and user requirements.

An aerial view of major facilities in Data Center Alley in Ashburn, Virginia. (Image: Loudoun County)

Northern Virginia Data Center Market: The Focal Point for Cloud Growth

The Northern Virginia data center market is seeing a surge in supply and an even bigger surge in demand. Data Center Frontier explores trends, stats and future expectations for the No. 1 data center market in the country.

See More Spotlight Features

Newsletters

Get the Latest News from Data Center Frontier

Job Listings

RSS Job Openings | Pkaza Critical Facilities Recruiting

  • Electrical Commissioning Engineer - Los Angeles, CA
  • Data Center Construction Project Manager - Ashburn, VA
  • Critical Power Energy Manager - Data Center Development - Dallas, TX
  • Data Center Facilities Operations VP - Seattle, WA
  • Senior Electrical Engineer - Data Center - Dallas, TX

See More Jobs

Data Center 101

Data Center 101: Mastering the Basics of the Data Center Industry

Data Center 101: Mastering the Basics of the Data Center Industry

Data Center Frontier, in partnership with Open Spectrum, brings our readers a series that provides an introductory guidebook to the ins and outs of the data center and colocation industry. Think power systems, cooling, solutions, data center contracts and more. The Data Center 101 Special Report series is directed to those new to the industry, or those of our readers who need to brush up on the basics.

  • Data Center Power
  • Data Center Cooling
  • Strategies for Data Center Location
  • Data Center Pricing Negotiating
  • Cloud Computing

See More Data center 101 Topics

About Us

Charting the future of data centers and cloud computing. We write about what’s next for the Internet, and the innovations that will take us there. We tell the story of the digital economy through the data center facilities that power cloud computing and the people who build them. Read more ...
  • Facebook
  • LinkedIn
  • Pinterest
  • Twitter

About Our Founder

Data Center Frontier is edited by Rich Miller, the data center industry’s most experienced journalist. For more than 20 years, Rich has profiled the key role played by data centers in the Internet revolution. Meet the DCF team.

TOPICS

  • 5G Wireless
  • Cloud
  • Colo
  • Connected Cars
  • Cooling
  • Cornerstone
  • Coronavirus
  • Design
  • Edge Computing
  • Energy
  • Executive Roundtable
  • Featured
  • Finance
  • Hyperscale
  • Interconnection
  • Internet of Things
  • Machine Learning
  • Network
  • Podcast
  • Servers
  • Site Selection
  • Social Business
  • Special Reports
  • Storage
  • Sustainability
  • Videos
  • Virtual Reality
  • Voices of the Industry
  • Webinar
  • White Paper

Copyright Endeavor Business Media© 2022