Subscribe To Our Daily Enewsletter:

Data Center M&A Activity: Private Equity Drives Record Deal Volume

The number of data center mergers and acquisitions set a record in 2019, driven by private equity-driven M&A deals, according to Synergy Research Group.

The M&A activity reinforces the fact that data center providers continue to compete effectively against public cloud services providers (CSPs) such as Amazon Web Services, Microsoft Azure and Google Cloud Platform.

For the year 2019, Synergy Research Group says data center M&A research highlights include:

  • the number of data center-oriented M&A deals closed passed the 100 mark for the first time, up 6 percent from 2018 and more than double the numbers of deals closed in 2016.
  • Over the last five years almost 350 deals have closed.
  • 2019 saw a dramatic 50% increase in private equity deals, which more than offset a sharp 45% drop in M&A deals closed by public companies.
  • While deal volume increased in 2019, the aggregate value of those deals declined due to a 24% reduction in average deal value, continuing a trend seen in 2018.
  • 2017 marked a peak in average deal values thanks to three multi-billion dollar deals and three more valued at over a billion dollars each.
  • The number of billion-dollar deals declined in 2018 and again in 2019.
  • Since the beginning of 2015 Synergy has identified 348 closed deals with an aggregated value of $75 billion.
  • Since 2015 the largest deals to be closed are the acquisition of DuPont Fabros by Digital Realty, the Equinix acquisition of Verizon’s data centers and the Equinix acquisition of Telecity.
  • Over the 2015-2019 period, by far the largest investors have been Digital Realty and Equinix. In aggregate they account for 31% of total deal value over the period.
  • Additional serial acquirers include CyrusOne, Iron Mountain, Digital Bridge/DataBank, NTT, GI Partners, Carter Validus, GDS, QTS and Keppel.

Data Center Mergers, Acquisitions: Synergy Research Group Perspectives

John Dinsdale

In a prepared statement about the research findings, John Dinsdale, a chief analyst at Synergy Research Group, said:

“The aggressive growth of cloud services and outsourcing trends more generally are fueling a drive for scale and geographic reach among data center operators, which in turn is stimulating data center M&A activities,. This has been attracting an ever-increasing level of private equity activity as investors seek to benefit from high-value and strategically important data center assets. It is also notable that even the biggest publicly traded data center operators are increasingly turning to joint ventures with external investors to help fund growth and protect balance sheets.”

ChannelE2E also tracks data center mergers and acquisitions. See our list of IT industry M&A deals for 2020 here; we update the list daily.

Return Home

No Comments

Leave a Reply

Your email address will not be published. Required fields are marked *