Synergy Research Group said that 87 data center-oriented M&A deals closed in the first six months of the year with an aggregate value of $24 billion.
In addition, there is an additional $18 billion of pending deals in data center business in the pipeline.
Synergy logged 211 deals that closed in 2021 with an aggregate value of over $48 billion, 41 percent up from the 2020 total of $34 billion.
In the 2015-2018 period private equity buyers accounted for 42 percent of data center deal value. In 2019 to 2021, private equity share of the total data center deal value increased to 65 percent, while in the first half of 2022 private equity share has jumped to over 90 percent.
The highlights have been the $15 billion acquisition of CyrusOne by investment firms KKR and Global Investment Partners, and the pending acquisition of Switch by DigitalBridge for $11 billion. The 2021 highlights were the acquisitions of CoreSite and QTS, each for around $10 billion. These deals represent the four highest value acquisitions the industry has ever seen.
All four acquired companies feature in the worldwide top 15 ranking of colocation operators, while they are ranked three through six in the US market, behind only Equinix and Digital Realty.
Prior to these four record-setting transactions, the biggest data center M&A deals were Digital Realty’s $8.4 billion acquisition of Interxion, Digital Realty’s $7.6 billion acquisition of DuPont Fabros, the Equinix acquisition of Telecity for $3.8 billion, the Equinix acquisition of Verizon’s data centers for $3.6 billion and the acquisition of Global Switch by Jiangsu Shagang Group of China for over $8 billion.
Apart from these mega deals, some of the most notable serial acquirers have been Equinix, Digital Realty, EQT, DigitalBridge/Vantage, CyrusOne, GDS, GI Partners, Keppel, Macquarie, Mapletree and NTT.
“There is an ever-increasing demand for data center capacity, driven by rapidly growing cloud markets, aggressive expansion of hyperscale operator networks and continued growth of data-rich digital services,” said John Dinsdale, Chief Analyst at Synergy Research Group.
“The trouble is that building and operating large fleets of data centers is highly capital intensive. Even the biggest data center operators have had to seek external funding to allow them to meet growth targets while protecting their balance sheets.”