CyrusOne is reportedly thinking over selling itself after being approached by private investors. On Friday, Bloomberg reported that Dallas-based CyrusOne was working with an advisor to consider its strategic options after being approached about a potential sale, according to unnamed sources.
Sami Badri, a senior equity analyst at Credit Suisse, wrote in an investor note on Friday that the sale of CyrusOne was likely.
"We believe CONE (CyrusOne) is in a unique position, capable of being successful in both the private or public domain, where a private equity or strategic buyer takes the company over," he wrote.
Bloomberg reported that a bidder group comprised of KKR & Co, Stonepeak Infrastructure Partners and I Squared Capital was in the initial stages of weighing a bid for CyrusOne, but there are other potential bidders as well. KKR is reportedly the leading the effort, according to Bloomberg.
The three named suitors have been active in the infrastructure sector of late. Stonepeak, KKR, and I Squared, along with Blackstone Groups, teamed up in an attempt acquire Zayo Holdings, which instead sold to two investors for $8.8 billion. Stonepeak bought Cologix in 2017.
CyrusOne, which was founded in 2001, has a network of 48 data centers across the U.S., U.K., Singapore and Germany. While Equinix and Digital Realty are the leaders in the data center and colocation sectors, CyrusOne has previously been active in the M&A data center space. Last year, CyrusOne bought Zenium Technology Partners for $442 million.
Investors are keen on putting their capital toward data centers and colocation facilities. Hyperscale providers such as Microsoft Azure, Google and Amazon Web Services are pushing the capacity demands of data centers while telcos and enterprises are also using them to enable their business services and applications.
Last week a report by Synergy Research Group said that data center mergers and acquisitions in North America were on track for another record year. Synergy Research Group's data showed that 52 data center-focused mergers and acquisition (M&A) deals have closed in the first half of this year, which was an increase of 18% over the first half of last year.
The strong start points to another record year for M&A volume with eight more deals having closed since the beginning of July, along with 14 more that have been agreed upon but are still pending, according to Synergy Research Group (SRG.)
"CyrusOne has been growing strongly over the last five years and has gradually moved up the rankings of the world’s largest colocation providers," said John Dinsdale, a chief analyst at Synergy Research Group, in an email to FierceTelecom. "Five years ago it was not in the top 10, but now it is tied for fifth place in the rankings based on worldwide colocation revenues. In the U.S. market it is now ranked third and a long way ahead of following colocation providers."
CyrusOne’s stock price grew by as much as 16.6% on Friday, with shares closing with a 5.3% increase at $69.99 per share. In mid-Monday morning trading, CyrusOne's stock was at $69.98 per share.