Digital Realty Eyeing CyrusOne Acquisition: Report

Digital Realty is looking to buy data center rival CyrusOne, which owns approximately 48 data centers across the globe.

Two data center heavyweights could be joining forces as Digital Realty Trust is reportedly looking to acquire data center rival CyrusOne.

CyrusOne stock has been soaring over the past few months following reports this summer that the Dallas, Texas-based data center specialist was looking at potential suitors after receiving takeover interest. The newest suitor is Digital Realty, according to a report by Bloomberg citing people familiar with the situation.

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A bidder group including Stonepeak Infrastructure Partners, KKR & Co., and I Squared Capital are in the early stages of weighing a bid for CyrusOne, according to Bloomberg. Additionally, investment firms Digital Colony Partners and EQT Partners are partnering up to potentially buy the CyrusOne. Digital Realty and CyrusOne did not respond to comment on the matter by press time.

CyrusOne shares have gained more than 50 percent in 2019. The company’s stock climbed from around $55 per share in late July to now $78.36 per share as of Monday afternoon.

The company, named in CRN’s 2018 Data Center 100 list, generated $821 million in revenue in 2018 and currently has a market cap of $8.87 billion.

The data center M&A market has been on a blistering pace in 2019. A whopping 52 data center-oriented acquisitions closed in the first half of 2019, up 18 percent year over year, setting up 2019 to become a record year for data center M&A. The two companies that continue to lead the M&A charge are Digital Realty and Equinix, which in aggregate account for 36 percent of the value deals over the last four years.

CyrusOne is a real estate investment trust that invests in carrier-neutral data centers and provides colocation services. The company has a total of 48 data centers in the U.S., U.K., Singapore and Germany, providing mission-critical data centers that protect and ensure the continued operation of IT infrastructure for approximately 1,000 customers including more than 200 Fortune 1,000 companies.

This year, the global data center provider said it was building a campus in Santa Clara, Calif. that will be the largest mission-critical data center concentration in Silicon Valley. The new campus will deliver over 100 megawatts of capacity and offer up to 25 megawatts of power capacity.

CyrusOne has been acquiring and building data centers at a blistering pace over the past few years. In August, CyrusOne completed the acquisition of four Zenium data centers. CyrusOne facilities are engineered to include the power-density infrastructure required to deliver high availability, including an architecture with the highest available power redundancy.