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Q1: Data centre M&A deals have already passed 2019 total

Written by Thu 23 Apr 2020

2020 will “bumper year” for data centre M&A activity

The value of data centre-related M&A deals that closed in the first quarter of 2020 has already exceeded the 2019 total, according to new market data.

Synergy Data published the latest quarterly stats Thursday, just over a month since Digital Realty closed its $8.4 billion acquisition of Interxion.

Synergy credited the deal, which is the largest ever data centre transaction, for driving the accelerated figures this year.

“The last four years has seen a surge in the volume of data center deals, but in the last two years the aggregate value dropped due to a relative lack of mega-deals,” said John Dinsdale, chief analyst, Synergy Research. “Digital Realty helped to fix that.”

The researchers documented 28 data centre-oriented M&A deals that closed in 2020. In addition to the Digital Realty deal, two other billion-plus deals have closed so far this year as well as two that were valued at over $500 million.

Dinsdale said Synergy had identified 17 more agreed deals pending closure plus several more potentially multi-billion dollar deals.

“This will be a bumper year for data center M&A activity,” said Dinsdale.

“What is causing this surge in M&A? Outsourcing trends and the aggressive growth in cloud services are driving ever-growing demand for data center capacity, which in turn is fueling both industry restructuring and a need to find new sources of investment capital,” he added.

Synergy has been recording data centre-related M&A deals since 2015. The analyst has tracked 388 deals with an aggregated value of $90 billion.

Over the period deal value has been split equally between public companies and private equity buyers, while private equity buyers have accounted for 57 percent of deal volume.

To date, the largest data centre M&A deals to have closed are Interxion and DuPont Fabros by Digital Realty, the acquisition of Global Switch by a group of Chinese investors and the acquisitions of Verizon data centers and Telecity by Equinix. Equinix and Digital Realty account for 35 percent of total deal value since 2015.

Written by Thu 23 Apr 2020

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