Data Center M&A Deal Volume Grew in 2018; but Total Value Dropped from 2017

RENO, NV, January 14, 2019

New data from Synergy Research Group shows that the number of significant data center-oriented M&A deals continued to climb in 2018, though the total value of deals that closed in the year dropped off from its 2017 peak. 2018 saw 68 deals close with an aggregate value approaching $16 billion. While this included five billion-dollar-plus deals, none approached the scale of the 2017 acquisition of DuPont Fabros by Digital Realty or the Equinix acquisition of Verizon’s data centers. The largest 2018 deal was the sale of a 25% stake in Global Switch to a group of Asian investors, which was valued at £2.1 billion or around $2.8 billion. The other four deals that were valued at a billion dollars or more involved acquisitions by Digital Realty, Iron Mountain, GTT and Brookfield Infrastructure Partners. There were another 18 deals that were valued in the $100 million to $1 billion range, and 45 smaller deals that were each valued at up to $100 million. The total value of M&A activity over the 2017-2018 period was over double the total for the previous two years.DC MA 2018 Over the 2015-2018 period, by far the largest investors have been Equinix and Digital Realty, the world’s two leading colocation providers. In aggregate they spent almost $23 billion on acquisitions of data center operators. Both Equinix and Digital Realty have made major acquisitions in all four regions of the world. Other notable data center operators who have been serial acquirers include CyrusOne, Iron Mountain, Digital Bridge/DataBank, NTT and Carter Validus.

“There is a clear trend towards enterprises not wanting to own or operate their own data centers, as CIOs focus more on features and services that they can provide to their internal clients and less on the complexities of running data centers,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “As enterprises increasingly look to various outsourcing options, this is driving specialist data center operators to increase both the scale and the reach of their data center footprint. This bulking up is often best accomplished, or sped up, by acquiring other data center operators. We expect to see a lot more data center M&A over the next five years.”

About Synergy Research Group

Synergy provides quarterly market tracking and segmentation data on IT and Cloud related markets, including vendor revenues by segment and by region. Market shares and forecasts are provided via Synergy’s uniquely designed online database tool, which enables easy access to complex data sets. Synergy’s CustomView ™ takes this research capability one step further, enabling our clients to receive on-going quantitative market research that matches their internal, executive view of the market segments they compete in.

Synergy Research Group helps marketing and strategic decision makers around the world via its syndicated market research programs and custom consulting projects. For nearly two decades, Synergy has been a trusted source for quantitative research and market intelligence. Synergy is a strategic partner of TeleGeography.

To speak to an analyst or to find out how to receive a copy of a Synergy report, please contact Heather Gallo at hgallo@srgresearch.com or 775-852-3330 extension 101.