While this M&A deal volume growth in 2018 included $5 billion+ deals, none approached the scale of the 2017 acquisition of DuPont Fabros by Digital Realty – a transaction valued at approximately $7.6 billion, or the Equinix acquisition of Verizon’s data centers for $3.6 billion in an all cash transaction.
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 including Iron Mountain buying Amsterdam area-based EvoSwitch for €205 million, 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.
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Equinix, Digital Realty, CyrusOne
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.”
Read more at Global Data Center M&A Deal Volume in 2018 Grows, Value Drops on Website Hosting Review.