Data center companies CyrusOne and CoreSite acquired in deals totaling $25B

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It’s been quite a week for data center industry consolidation in the US two companies, sirsavan And CornerDeclared Deals Valuable $15 billion. Feather And 10 billion dollars, respectively. It is unusual to see two companies in the same industry announce such a huge acquisition on the same day, but that is exactly what happened on Monday.

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Let’s start with the bigger of the two deals. KKR, a well-known private equity firm, and Global Infrastructure Partners, a company that invests in infrastructure companies such as data centers, both agreed to pay Cyrusavan a 25% premium to its closing stock price of $72.57 per share on September 27. Seen suitable. terms of the deal.

The deal has already been approved by the Cyrusavan board and, pending regulatory approval, is expected to close sometime in the second quarter of next year.

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Synergy Research Group, which tracks cloud and data center data, reports that this is the largest data center company deal ever, is easily assuming Blackstone’s QTS . acquisition of earlier this year for $10 billion.

Meanwhile, CoreSight matched the biggest deal ever when it announced it was being bought by American Tower, a real estate investment trust (REIT) for $10 billion. According to the company, it boasts 25 data centers, 21 cloud on-ramps and more than 32,000 interconnections in eight major US markets, generating $655 million in annual revenue.

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These companies may not be household names, but Synergy reports that they are the third and fourth largest U.S. data center operations, measured by colocation (the number of firms using their services) and revenue. Both companies have a strong presence in the US market. John Dinsdale, principal analyst at Synergy, says continued growth in these operations necessitates increased investment.

“The level of data center investment required is too high for even the largest data center operators, leading to an influx of new money from outside investors,” Dinsdale said in a statement. “In quick succession, ownership of four of the top six US data center operators has changed, while the two biggest names in the industry – Equinix and Digital Realty – increasingly turn to joint ventures to help fund their growth. are doing.”

Interestingly, with both the stocks falling today, investors are not enthusiastic about these deals despite the seemingly flimsy price tags.

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