Investment company EQT Infrastructure announced on Wednesday that it's buying data center provider EdgeConneX for an undisclosed sum. The deal is expected to close in the fourth quarter of this year after it meets customary closing conditions.
EQT is buying EdgeConneX from an investor group led by Providence Equity Partners. With more businesses moving their data and applications into the cloud, along with 5G, and edge compute, data center deals have picked up in 2020.
John Dinsdale, a chief analyst at Synergy Research Group, said earlier this year that 2020 would be a banner year for data center M&A activity. In the first four months of this year, the value of closed data center deals eclipsed the total for all of 2019, according to Synergy Research Group (SRG.)
Data center mergers and acquisitions were spurred by Digital Realty's $8.4 billion deal to buy Interxion, which closed in April, as well as two other billion dollar deals that have also closed this year. By April, SRG identified 28 data center-related acquisitions that had closed in 2020.
In March, affiliates of Digital Colony Partners and the EQT Infrastructure IV fund announced they had completed their deal to buy Zayo Group Holdings for $14.3 billion. In June, Equinix announced it was buying 13 data centers from Bell (BCE) for $750 million in cash.
In January, Equinix announced it was buying bare metal data center company Packet. When the deal closed in March, Equinix said it had paid $335 million for Packet. Equinix announced in October that it was buying three data centers from Axtel for $175 million.
Herndon, Virginia-based EdgeConneX bills itself as the preeminent global edge data center provider. It has 40 data centers that are operating in 31 markets across North America, South America and Europe. It also has 222 small points-of-presence inside of office buildings and at the same time has provided hyperscale providers with more than 100 megawatts of space. EdgeConneX was founded in 2009, and then it proceeded to build its first 23 data centers in 24 months, which were mainly 1 or 2 megawatts each.
According to Crunchbase, EdgeconneX has raised a total of $122 million with a Series D round in August of 2017.
Being owned by EGT will give EedgeConneX deeper pockets to build data centers in new markets, especially overseas. EdgeConneX operates in 28 markets in the U.S., with two in South America, and four in Europe. Amazon Web Services and Microsoft have both put on ramps into EdgeConneX's facilities, while Google has peered with it.
“EQT brings significant financial resources and digital infrastructure industry experience which EdgeConneX will use to accelerate growth and invest in new data centers around the world," said EdgeConneX CEO Randy Brouckman, in a statement. "I look forward to continuing to lead EdgeConneX and we are very pleased to have EQT as our new owner and partner in this exciting growth phase."
On Monday, The Mercury News reported that an EdgeConneX affiliate, EdgeConneX Silicon Valley Holdings II, paid $83.3 million for the buildings in Santa Clara, California. The buildings total 229,000 square feet and the deal closed earlier this month.