Data Center M&A Continues: $48 Billion in Deal Volume in 2022

Jan. 31, 2023
Merger and acquisition activity in the data center remained near record levels in 2022, with total deal value of $48 billion, according to Synergy Research Group. Private investors dominated the M& action.

Merger and acquisition activity in the data center remained near record levels in 2022, with 187 transactions at a total deal value of $48 billion, according to Synergy Research Group. That was just shy of the record-setting $49 billion in deals that closed in 2021.

Private equity investors dominated the deal action, reflecting a long-term trend in which public data center companies have been acquired and taken private by investment firms. That trend was reflected in two of the megadeals that closed in 2022. 

  • In March, data center developer CyrusOne became a private company as it completed its $15 billion sale to investment firms KKR and Global Infrastructure Partners.      
  • In December, DigitalBridge and IFM Investors completed their $11 billion acquisition of Switch, taking the data center company private in a deal that priced Switch at $34.25 per share.

In 2020 private equity firms accounted for 55% of the value of closed deals, rising to 66% in 2021 and 91% in 2022, according to Synergy. Since 2018 private equity funding has risen by an average 50% per year and in 2022 reached $44 billion.

This outsized M&A activity over the  last several years as not been a surprise to readers of Data Center Frontier. In May 2020 we predicted that the COVID-19 pandemic could "drive a surge in data center M&A that would reshape the industry landscape."    

Through this process, the list of "pure play" publicly-held data center companies has grown steadily smaller, with Digital Realty, Equinix, DigitalBridge and Cyxtera representing the last three U.S.-based operators focused primarily on data centers. Iron Mountain and American Tower also operate data centers within larger businesses focused on telecom towers and document storage, respectively. 

The 2022 deal data affirms the growing attractiveness of digital infrastructure for global investors. In the last seven years the total value of M&A deals has now passed the $200 billion mark, with almost half of that coming in the last two years. Since 2018 the average deal size has almost tripled, growing from $80 million to $235 million.

The world’s largest investors are focusing on the market for digital infrastructure, citing extraordinary demand for capital to fuel the data economy. Investment interest in data centers has been boosted by the growth of hyperscale computing, where the tenant is a giant corporation with excellent credit, lowering the risk profile for investors. The data center business is also positioned to benefit from a range of emerging technologies including AI, the Internet of Things5G wireless, and augmented reality and the metaverse.

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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