CyrusOne is entering the New York data center market by acquiring colocation provider Cervalis, which has four data centers and two disaster-recovery facilities in the New York metro. The companies expect to close the all-cash $400-million transaction within the next 45 to 60 days.
The acquisition brings the size of publicly traded CyrusOne’s portfolio to 31 data centers across 12 markets: 10 U.S. cities plus London and Singapore. The Carrollton, Texas-based data center provider converted into a real estate investment trust and went public in 2013.
The deal gives CyrusOne instant presence in the New York data center market, one of the world’s biggest and most desirable regions for data center customers. Elsewhere in the U.S., the company has data centers in Texas, Virginia, Indiana, Illinois, Arizona, Ohio, and Kentucky.
Cervalis has one data center in Wappingers Falls, New York, and one in Totowa, New Jersey. The other two are in neighboring Connecticut – in Norwalk and Stamford.
Together, the four Cervalis data centers have about 125,000 square feet of colocation space. Close to 80 percent of that space was occupied by its 220 or so enterprise customers as of the end of last year.
The properties have capacity for additional 55,000 square feet of colo space.
The “work-area recovery space” in the two other facilities measures about 100,000 total.
Cervalis made about $70 million in sales in 2014, according to CyrusOne. About two-thirds of that revenue came from colocation services, and the rest from interconnection, managed service, and work area recovery services.
Cervalis has grown its revenue at a compound annual rate of about 14 percent over the last five years.
Gary Wojtaszek, president and CEO of CyrusOne, said he has always admired the platform focused on the financial services industry Cervalis has built. “Their focus on serving the needs of the largest financial enterprise customers in the world will be a valuable complement to CyrusOne,” he said in a statement.