Since 2015 Synergy has logged a total of 1,381 data center-oriented M&A deals, with an aggregate value of $276 billion. Most of this comes from company acquisitions, but the numbers also include minority equity investments, investments in joint ventures, acquisitions of individual data centers, share sales and acquisition of land for data center development. The four $10 billion-plus deals that closed in 2021 and 2022 were the acquisitions of CyrusOne, Switch, CoreSite and QTS. All four acquired companies feature in the worldwide top 15 ranking of colocation operators, while they are ranked in the top seven in the US market. The biggest deals to close so far in 2024 are the equity investments in Vantage Data Centers and EdgeConneX. Apart from the rapid rise in overall data center M&A activity over the ten-year period, the most notable feature has been the extent to which private equity has flooded into the market. In 2020 private equity accounted for 54% of the value of closed deals, rising to 65% in 2021, and since then it has remained in the 85-90% range.
“There has been an inexorable rise in the demand for data center capacity, driven by cloud services, social networking and a range of both consumer and enterprise digital services. The rise of generative AI is adding a further boost to demand. Specialist data center operators have either not been able to fund those investments themselves, or they were not prepared to put their balance sheets at risk,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “Meanwhile, data centers are very much being viewed as long-term safe havens for investments, even during turbulent times, which has caused a huge influx in private equity. We do not anticipate that picture changing any time soon.”
About Synergy Research Group
Synergy Research Group provides quarterly market share analysis and forecasts for Communications and Cloud related industries. Our data and analysis is provided to clients through Synergy’s unique research SaaS platform, SIA™, which enables intuitive access to complex and fast-moving data sets.
Synergy’s Competitive Matrix™ and CustomView™ take 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’s data analytics and analysis have been widely recognized worldwide for over 20 years and are frequently used by global industry leaders, governments, and financial institutions.
To speak to an analyst or to find out more about how to access Synergy’s in-depth market data, please contact Heather Gallo @ [email protected] or at 775-785-3113.
SOURCE Synergy Research Group
