Equinix expanded its presence in the Frankfurt market with the acquisition of ancotel GmbH, which includes the Kleyer90 facility shown above . It was one of the year’s top 10 deals. (Photo: ancotel)
In the data center world, there are two factors that drive acquisitions: geography and technology. Deals can help providers enter new markets and expand their footprint, or help them keep pace in areas where technology is evolving rapidly. Not surprisingly, 2012 was a busy year for mergers and acquisitions (M&A). Here are 10 deals that capture the year in M&A:
Digital Realty’s Ongoing Acquisition Spree
Data center developer
Digital Realty Trust has a history of growing through acquisition, and was busy on the M&A front this year. The big deal was paying about $1.1 billion (715 million pounds) to
acquire three large data centers [1]in the London market from UK provider Sentrum. Digital Realty was also busy expanding in the Dallas market, acquiring the
Convergence Business Park [2], an 819,000 square foot data center and office campus in suburban Dallas and 400 South Akard Street in Dallas, also known as
The Databank Building [3]. Also in Texas, it acquired
8025 North Interstate 35 [4], a fully-leased data center facility in Austin, Texas, for $12.5 million. Another notable deal was the acquisition of a
575,000 square foot redevelopment property in Franklin Park, Ill. [5] for $22.3 million, marking its entrance into the suburban Chicago market. The three-building property has an existing tenant and considerable land to develop data centers.
Equinix acquires Ancotel and AsiaTone
After years of building out its data center footprint in the U.S., Equinix is using acquisitions to extend its “Platform Equinix” across the globe. In 2012, Equinix
acquired ancotel GmbH [6]of Frankfurt, Germany in a deal that further boosts the strength of its network in Frankfurt, one of the world’s most important meeting points for Internet traffic and financial trading. Equinix also completed a $230 million acquisition of
Hong Kong-based data center provider Asia Tone [7]in an all cash transaction valued at $230.5 million, which strengthens the colocation specialist’s position in the Asia-Pacific region, including China.
365 Main Buys 16 Sites From Equinix
Even as Equinix was making deals to grow internationally, it pruned its U.S. network by divesting 16 of the facilities it acquired in its 2010 purchase of Switch & Data, a provider known for its focus on second-tier markets. The buyer was a familiar name.
365 Main [8] came off the sidelines, teaming with Crosslink Capital and Housatonic Partners to pay $75 million for the facilities, which total 280,000 square feet of data center space. As Equinix sharpened its focus on its core high-connectivity markets, the 365 Main team joins a number of emerging players in targeting growth in second-tier markets.
VMware Acquires Nicira in $1.2 Billion Embrace of SDN
Amid growing buzz about the transformative power of software-defined networking (SDN), VMWare made a bold move with its $1.2 billion
acquisition of Nicira [9], a leading player in the SDN world. Nicira’s software platform manages a network abstraction layer, which lets users create virtual networks that operate independently of the underlying physical network hardware. This acquisition was quite sizeable, and sparked a software-defined networking frenzy, as
Oracle acquired Xsigo [10], a specialist in I/O virtualization, just a week later.
AMD Buys SeaMicro
AMD’s deal to
acquire SeaMicro [11] for $334 million was a disruptive one for the low-power server landscape, as SeaMicro had been using Intel chips in next-generation servers offering dramatic reductions in power and space usage. The deal strengthened AMD’s position in the push toward low-energy servers, which involves a crowd of newcomers (most notably
Calxeda [12] and
Tilera [13]) in addition to Intel, which has since adapted its
Atom mobile chips [14] for use in servers. The crown jewel in the acquisition is SeaMicro’s networking fabric, which allows hundreds of low-power processors to work together.
Dell acquires Quest Software
Data center management is a key focus for a growing number of players who want to provide a “single pane of glass” to allow companies to track and manage their data center assets and capacity. This was the theme of one of 2012′s larger industry deals, as
Dell acquired Quest Software [15] for $2.4 billion in a transaction that strengthened Dell’s offerings for data center management software. The purchase is part of Dell’s broader strategy to increase its enterprise IT business, which offers better growth and profit margins than the consumer PC business. Software is a key part of that effort, as data center managers seek improved tools to manage their increasingly complex infrastructure.
Cisco acquires Meraki
In November,
Cisco announced [16] its intent to
acquires [17] privately held cloud networking company
Meraki for $1.2 billion. Cisco (CSCO) will gain new cloud-based network offerings with the acquisition. Meraki’s wireless, switching, and security solutions, delivered on edge and branch networks will expand Cisco’s network offerings by providing scalable solutions for mid-market businesses. Meraki will also strengthen Cisco’s Unified Access platform, which seeks to unite wired and wireless networks, policy and management into one integrated network infrastructure.
Bell Canada Buys Q9 Networks
Bell Canada partnered with a group of investors to buy data center provider
Q9 Networks [18] for $1.1 billion ($1.06 billion US). It was the latest in a series of deals in which telcos have bought up data center companies to expand into the growing market for cloud computing services. The deal is also a huge win for private equity firm ABRY Partners, which bought Q9 Networks in 2008 for $361 million. The transaction marks the second time ABRY has acquired a data center provider and sold it to a telecom provider for a substantial premium, a model previously followed in ABRY’s 2007 purchase of Texas provider CyrusOne.
SAP’s $4.3 Billion Cloud Bet on Ariba
If this list was based on price, this deal would be much higher up. SAP America
acquired Ariba [19] for $4.3 billion to boost cloud offerings. Ariba is a cloud-based business commerce network, and it was acquired for $45.00 per share, or about $4.3 billion. Ariba’s buyer-seller collaboration network will be combined with SAP’s existing solutions and create new models for business-to-business collaboration in the cloud. The acquisition makes the list because it shows SAP’s bet on cloud – whereas the company was hesitant to do so 5 or so years ago as Salesforce.com rose the ranks. This deal shows that there is no escaping the enterprise momentum to shift workloads to the cloud.
iNET Interactive Buys DCK, AFCOM
We might be biased here, but it’s been great at our new home. iNET Interactive
acquired Data Center Knowledge [20] in April, continuing to build its focus on the data center sector. In late 2011 iNET acquired
AFCOM [21], the leading industry association ford ata center managers, along with the
Data Center World [22] conference series.
iNET Interactive [23] is a web-centric media company serving special interest communities through prominent online properties, events, and publications.
Jason Verge is an Editor/Industry Analyst on the Data Center Knowledge team with a strong background in the data center and Web hosting industries. In the past he’s covered all things Internet Infrastructure, including cloud (IaaS, PaaS and SaaS), mass market hosting, managed hosting, enterprise IT spending trends and M&A. He writes about a range of topics at DCK, with an emphasis on cloud hosting.
Article printed from Data Center Knowledge: http://www.datacenterknowledge.com
URL to article: http://www.datacenterknowledge.com/archives/2012/12/21/the-big-ma-deals-of-2012/
URLs in this post:
[1] acquire three large data centers : http://www.datacenterknowledge.com/archives/2012/06/26/digital-realty-buys-london-sites-1-1-billion/
[2] Convergence Business Park: http://www.datacenterknowledge.com/archives/2012/02/27/digital-realty-acquires-huge-dallas-campus/
[3] The Databank Building: http://www.datacenterknowledge.com/archives/2012/06/21/digital-realty-buys-databank-building/
[4] 8025 North Interstate 35: http://www.datacenterknowledge.com/archives/2012/06/19/digital-realty-buys-fully-leased-austin-data-center/
[5] 575,000 square foot redevelopment property in Franklin Park, Ill.: http://www.datacenterknowledge.com/archives/2012/06/06/digital-realty-buys-campus-in-suburban-chicago/
[6] acquired ancotel GmbH : http://www.datacenterknowledge.com/archives/2012/05/16/equinix-buys-ancotel-to-boost-frankfurt-presence/
[7] Hong Kong-based data center provider Asia Tone : http://www.datacenterknowledge.com/archives/2012/05/02/equinix-boosts-asia-footprint-with-230m-deal/
[8] 365 Main: http://www.datacenterknowledge.com/archives/2012/09/05/365-main-buys-16-data-centers-from-equinix/
[9] acquisition of Nicira: https://www.datacenterknowledge.com/archives/2012/07/23/vmware-buys-sdn-pioneer-nicira-1-billion-deal/
[10] Oracle acquired Xsigo: http://www.datacenterknowledge.com/archives/2012/08/01/oracle-to-acquire-xsigo/
[11] acquire SeaMicro: http://www.datacenterknowledge.com/archives/2012/02/29/amd-to-acquire-server-innovator-seamicro/
[12] Calxeda: http://www.datacenterknowledge.com/archives/2012/10/02/calxeda-well-have-production-servers-by-year-end/
[13] Tilera: http://www.datacenterknowledge.com/archives/2012/10/12/tilera-focused-performance-per-watt/
[14] Atom mobile chips: http://www.datacenterknowledge.com/archives/2012/12/11/intel-unveils-low-power-atom-chips-for-servers/
[15] acquired Quest Software: http://www.datacenterknowledge.com/archives/2012/07/02/dell-buys-quest-2-4-billion-boost-data-center-management/
[16] announced: http://newsroom.cisco.com/press-release-content?type=webcontent&articleId=1106087
[17] acquires : http://www.datacenterknowledge.com/archives/2012/11/20/cisco-to-acquire-meraki-for-1-2-billion/
[18] Q9 Networks: http://www.datacenterknowledge.com/archives/2012/06/04/bell-canada-buys-q9-networks-for-1-1-billion/
[19] acquired Ariba: http://www.datacenterknowledge.com/archives/2012/05/25/deal-watch-sap-buying-ariba-for-4-3-billion/
[20] acquired Data Center Knowledge: http://www.datacenterknowledge.com/archives/2012/05/04/inet-interactive-acquires-data-center-knowledge/
[21] AFCOM: http://www.afcom.com/
[22] Data Center World: http://www.datacenterworld.com/spring2013/
[23] iNET Interactive: http://www.inetinteractive.com/
[24] Jason Verge: http://www.datacenterknowledge.com/archives/author/jasonv/
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