San Francisco-based Digital Realty has agreed an $8.3 billion takeover of Dutch co-location data centre provider Interxion, which will see it add a major European footprint to its portfolio, including facilities in central London (LON1, LON2, and LON3) that are used by a wide range of financial services organisations.
Interxion’s European business includes 53 carrier- and cloud-neutral facilities in 11 countries. “The combination will create a leading pan-European data center presence, offering consistent, high-quality services with low-latency access to approximately 70 percent of the GDP in Europe,” Digital Realty said.
Under the terms of the Interxion buyout — which remains subject to regulatory and shareholder approval — Interxion shareholders will receive a fixed exchange ratio of 0.7067 Digital Realty shares per Interxion share. The transaction values Interxion at approximately $93.48 per ordinary share.
The proposed acquisition comes as consultancy CBRE reported a record take-up of 57MW across the four largest colocation markets in Europe in Q2.
Frankfurt, London, Amsterdam and Paris recorded a record 98MW at the half-year; 11MW higher than the previous half-year record.
CBRE analysis shows that Frankfurt recorded 44MW of take-up in the first half of the year and is set to beat London’s 2018 full-year total of 77MW, the current highest total for any individual market. Frankfurt’s take-up in H2 will be bolstered by pre-lets to some of the large new facilities set to launch in the market.
Co-location providers take the capex and investment risk for those seeking data centres, building out the infrastructure at scale – e.g. security, power, cooling – then leasing racks of servers and other services like key management to clients ranging from cloud providers to enterprise or government customers.
European data centre demand is being driven by cloud companies, with CBRE telling Computer Business Review earlier this year that hyperscaler cloud companies now account for 81 percent of all up-take.
Digital Realty CEO William Stein will lead the combined company. Interxion CEO David Ruberg will serve as the Chief Executive of the combined company’s EME) business, which will be branded “Interxion, a Digital Realty company”.
“The combined company will be uniquely positioned to meet the growing global demand from cloud platforms, service providers and enterprises seeking colocation, hybrid cloud and hyperscale data center solutions as IT architectures are re-engineered to support the explosive growth of data in modern business models” the two said.