Since 2015, Synergy has completed a total of 1,381 M&A deals in the data center sector with a total value of 276 billion US dollars. The majority of this comes from corporate acquisitions, but the figures also include minority investments, investments in joint ventures, acquisitions of individual data centers, share sales and the acquisition of land for data center development. The four 10 billion US dollars-plus deals completed in 2021 and 2022 were the acquisitions of CyrusOne, Switch, CoreSite and QTS. All four acquired companies are in the global top 15 colocation operators ranking, while in the top 7 in the US market. The largest deals completed so far in 2024 are the investments in Vantage Data Centers and EdgeConneX. Aside from the rapid increase 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 completed deals, increasing to 65% in 2021 and remaining in the 85-90% range since then.
“Demand for data center capacity has been rising inexorably, driven by cloud services, social networks and a range of digital services for consumers and businesses. The rise of generative AI is giving demand a further boost. Specialized data center operators have either been unable to finance these investments themselves or have been unwilling to put their balance sheets at risk,” said John DinsdaleChief Analyst at Synergy Research Group. “Data centers are now seen as long-term safe investment opportunities even in turbulent times, which has led to a huge influx of private equity. We do not expect this picture to change any time soon.”
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Synergy Research Group provides quarterly market share analysis and forecasts for the communications and cloud industries. Our data and analytics are delivered to clients through Synergy’s unique SaaS research platform, SIA™, which provides intuitive access to complex and rapidly changing data sets.
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