Record-breaking data center M&A deals reported in 2024
The year 2024 witnessed an unprecedented surge in data center mergers and acquisitions (M&A) activities, setting a new record in the industry. According to a recent analysis by Synergy Research Group, the total value of deals that closed in 2024 amounted to a staggering $57 billion. Additionally, another $29 billion worth of deals were agreed upon but were still in progress at the time of the report.
Among the noteworthy transactions in 2024 were two substantial equity investments in Vantage Data Centers, totaling $9.2 billion. Vantage Data Centers also secured a $3.1 billion equity investment in its EMEA operations. Moreover, EdgeConneX and DataBank also received significant equity investments during the year.
Comparing the M&A landscape in 2024 to previous years, it is evident that the industry experienced a significant uptick in activity. The previous peak was observed in 2022 when deals worth $52 billion were closed. In contrast, 2023 saw a decline in M&A activity, with transaction values dropping to $26 billion. Synergy Research Group’s report attributes the peak in 2022 to two major deals that exceeded $11 billion each, involving the acquisitions of CyrusOne and Switch in March and December of that year, respectively.
Excluding deals valued at $2 billion and above, 2021 emerges as the peak year, followed by a decline in 2022 by 32 percent, a further 7 percent drop in 2023, and a substantial 131 percent increase in 2024. Notably, the report highlights the influx of private equity into the data center sector as a significant trend. Since 2021, private equity has represented between 80 to 90 percent of the total value of closed deals.
It is essential to note that M&A deals encompass various types of transactions, including company acquisitions, investments in joint ventures, minority equity investments, individual data center acquisitions, share sales, and acquisitions of land for data center development. This diversity in deal structures reflects the dynamic nature of the data center industry and the innovative approaches adopted by companies to expand their market presence and operational capabilities.
As the industry continues to evolve and adapt to changing market dynamics, the trend of increased M&A activities, fueled by private equity investments, is likely to persist. The data center sector remains a key area of focus for investors seeking growth opportunities and strategic partnerships, driving the momentum for further consolidation and expansion within the market.
