![Digital Realty's ACC7 data center (formerly DuPont Fabros) in Ashburn, Virginia Digital Realty's ACC7 data center (formerly DuPont Fabros) in Ashburn, Virginia](https://eu-images.contentstack.com/v3/assets/blt8eb3cdfc1fce5194/blt514ca3d6f2b08eb1/662107cb3253aa1a34c3921a/DuPont-Fabros-ACC7_0.jpg?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
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:
Above all else, what is driving the data center M&A activity is enterprises focusing more on improving IT capabilities and less on owning data center assets. That shift is driving huge growth in outsourcing, whether it is via cloud services, or use of colocation facilities, or sale and leaseback of data centers. The dramatic growth of cloud providers is also driving changes in the data center industry, as data center operators strive to help them rapidly increase scale and global footprint. We expect to see much more data center M&A over the next five years.
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.
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.
About the Author
You May Also Like