Data Center Acquisitions Soared to a Record High in 2017

More data center assets changed hands last year than in the previous two years combined, making 2017 the biggest year ever for data center acquisitions.

That’s according to the latest report from Synergy Research Group, which estimated that the total volume of data center M&A deals that closed in 2017 was about $20 billion. The 48 transactions that closed last year surpassed a total of 45 deals that closed in 2015 and 2016 combined, according to the market analysts.

The acquisition activity is driven primarily by a spike in enterprise data center outsourcing, John Dinsdale, chief analyst and research director at Synergy, said in a statement:

Digital Realty Trust and Equinix, two of the world’s largest data center providers, spent more on acquisitions over the last three years than any other company in the space. Together, they spent $19 billion over the 2015-2017 period, excluding Equinix’s pending acquisition of the Australia data center operator Metronode, according to Synergy.

Related:The Cloud and Data Center Industry in 2017 -- Summing Up the Year

Equinix has been buying companies in all four global regions, while Digital’s investment has been focused primarily on North America and Europe.

CyrusOne, Peak 10, Digital Bridge, NTT, Carter Validus, Iron Mountain, Cyxtera, and Elegant Jubilee have been other key engines of consolidation.

The largest deal of 2017 was Digital Realty’s $7.6 billion acquisition of DuPont Fabros Technology. Four other deals valued at $1 billion or more closed last year: Equinix’s $3.6 billion acquisition of a massive Verizon data center portfolio, Cyxtera’s $2.15 billion acquisition of CenturyLink’s data centers, the $1.67 billion acquisition of ViaWest by Peak 10, and Digital Bridge’s acquisition of Vantage, reportedly for about $1 billion.

Another 12 deals valued in the $100 to $1 billion range closed last year, and 31 more that were valued up to $100 million each, according to Synergy.

More data center M&A activity is expected this year, and the 2018 deal pipeline is already growing. Just in December, Iron Mountain announced an agreement to buy IO’s North America business for $1.3 billion, Equinix agreed to buy Metronode, CyrusOne said it was buying Zenium for $442 million, and a news report surfaced that Infomart Data Centers was exploring a sale.