A-Team Insight Blogs

Digital Realty and Interxion Combine to Create Dominant Provider of Data Center Solutions

Share article

San Francisco-based Digital Realty has won the recent bidding war for European provider of carrier and cloud-neutral colocation data centre services, Interxion, entering into a definitive strategic agreement to acquire the firm for an estimated $8.4 billion – heralded as the biggest data centre transaction on record.

The stock-swap deal will propel Digital Realty into position as the second-largest data provider in Europe after Equinix – and represents a highly strategic play by the REIT, which saw its revenues grow 5% in the third quarter of 2019 and is keen to spend the cash on growing its global footprint and advancing its private capital program. “In the third quarter, we signed total bookings expected to generate $69 million of annualized GAAP rental revenue, including an $8 million contribution from interconnection,” said CEO A. William Stein. The firm also signed renewal leases representing $152 million of annualized GAAP rental revenue during the quarter.

Interxion will be a valuable addition to the stable, with a European business currently consisting of 53 carrier- and cloud-neutral facilities in 11 European countries and 13 metro areas including Frankfurt, Amsterdam, Paris and Interxion’s Internet Gateway in Marseille. This positioning is highly complementary to Digital Realty’s existing European footprint, with an established presence in London and Dublin. The combination will create pan-European data centre presence that has low-latency access to approximately 70% of the GDP in Europe.

In addition, Interxion’s well-established relationships with a diverse range of global cloud, digital media platform operators and multinational enterprise customers are expected to significantly bolster Digital Realty’s existing European platform, with the development of public and hybrid cloud architecture a key focus point going forward.

Interxion also has a healthy and attractive pipeline of data centre development projects currently under construction, with over $400 million invested to date and a total expected investment of approximately $1 billion. These projects represent roughly a 40% expansion of Interxion’s standalone critical load capacity, are significantly pre-leased and are expected to be delivered over the next 24 months, representing a solid pipeline of potential future growth for the combined company. The combined platform is expected to maintain strategic land holdings in key growth metros across Europe, providing the potential for significant long-term development value creation.

Stein will continue to serve as CEO of the combined company, while Interxion CEO David Ruberg will serve as the Chief Executive of the combined company’s EMEA business, which will be branded ‘Interxion, a Digital Realty company’ after the transaction is completed. Digital Realty Chief Financial Officer Andrew P. Power will serve as CFO of the combined company.

Leave a comment

Your email address will not be published. Required fields are marked *

*

Related content

WEBINAR

Upcoming Webinar: The Transformation of Buy-Side Market Surveillance

Date: 7 July 2020 Time: 10:00am ET / 3:00pm London / 4:00pm CET Asset managers, hedge funds, insurance firms, and other buy-side firms globally are becoming more active in their approach to market surveillance, as regulatory pressure to up their game mounts. Buy-side firms are now building out their surveillance infrastructure as they seek to...

BLOG

TNS Launches New York Upgrade for Ultra-low Latency Offering

US data communications provider TNS (Transaction Network Services) has upgraded its network in three New York Area data centres with the TNSXpress Layer 1 solution to speed up delivery of market data from NYSE, CBOE, and Nasdaq. The TNSXpress Layer 1, a single hop architecture that is up to 10 times faster than traditional Layer 3...

EVENT

TradingTech Summit London

The TradingTech Summit in London brings together European senior-level decision makers in trading technology, electronic execution and trading architecture to discuss how firms can use high performance technologies to optimise trading in the new regulatory environment.

GUIDE

RegTech Suppliers Guide 2019

Welcome to our brand new RegTech Suppliers Guide. This unique guide provides detailed data profiles on close to 100 suppliers in the RegTech world, offering you an unrivalled selection of solutions for your most pressing financial regulatory challenges. The aim of the A-Team’s RegTech Suppliers Guide is to steer you through this complex marketplace, offering...