Data Center Deals for 2010 (Updated)

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Has your data center provider changed hands? If so, you’re not alone, as several dozen data centers now have new owners. Back on March 22 we noted predictions from data center industry watchers chatter that there were deals in the pipeline that would make 2010 a busy year for mergers, acquisitions and IPOs. It didn’t take long for the action got underway, as the first acquisition was announced later that day.

The deals keep coming, with two major transactions announced last week. Here’s a rundown of the 2010 M&A activity in the data center industry:

TDS Communications – VISI (March 22): Minnesota data center services VISI Incorporated was acquired by TDS Telecommunications Corp. of Madison, Wisc. for a reported $17.8 million. This was the first of several deals in which telecom companies acquired data center providers.

Oak Hill Capital - ViaWest (April 20):  Oak Hill Capital Partners announced an agreement to acquire managed hosting provider ViaWest from its current owners, led by Trinity Equity Investors, Goldman, Sachs & Co. and Quilvest. Oak Hill Capital, a leading private equity firm and longstanding investor in the data center industry, teamed with ViaWest’s current management team.

CenturyTel – Qwest (April 22): CenturyTel will acquire Qwest Communications in a $10.6 billion stock swap. The deal is focused primarily on the telecom assets, but Qwest also operates 17 CyberCenter hosting facilities. It looks like there will be no immediate changes for the data center operations.

Cincinnati Bell - CyrusOne (May 12): Cincinnati Bell Inc.will buy colocation provider Cyrus One from its owner, ABRY Partners, in a cash transaction valued at approximately $525 million. CyrusOne will become a wholly-owned subsidiary of Cincinnati Bell (CBB) , retaining its brand and executive management team.

Savvis - Fusepoint (June 1): Savvis unveiled plans to acquire Canadian managed IT and colocation provider Fusepoint Inc. for $124.5 million in cash. Fusepoint operates three data centers in Toronto, Vancouver and Montreal and has more than 330 customers. The acquisition provides additional international expansion for Savvis.

Digital Realty Trust – 365 Main (June 2): Data center REIT Digital Realty Trust will buy the 365 Main portfolio of five data center properties from Rockwood Capital for about $725 million. The transaction adds 919,000 square feet of data center space in five major markets, along with more than 200 customers.

Emerson – Chloride (July 5): Chloride Group approved a $1.5 billion takeover offer from Emerson Electric, ending a bidding war for the UK-based critical power vendor, with Emerson prevailing over a rival offer from ABB.

GI Partners – SoftLayer Technologies (August 3): Private equity firm GI Partners has backed a management-led buyout of growing IT infrastructure specialist SoftLayer Technologies, GI Partners also owns controlling stakes in The Planet and Telx and a minority stake in ViaWest.

Eaton Corp. – Wright Line (August 4): Eaton Corp., which makes UPS systems and power distribution equipment, has agreed to acquire Wright Line Holding, which specializes in energy-efficient enclosures for data center racks.

Welsh Carson – Peak 10: (Sept. 1): Private equity firm Welsh, Carson, Anderson & Stowe   partnered with Peak 10 management to buy a controlling interest in Peak 10 from selling shareholders Seaport Capital and McCarthy Capital.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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