Record-breaking Data Center M&A Deals Seen in 2024
Data center acquisitions and mergers (M&A) experienced remarkable growth in 2024, breaking previous records, as stated in a recent analysis. In the course of 2024, deals with a combined value of $57 billion were finalized, with an additional $29 billion worth of deals in progress. These findings were detailed in a report by Synergy Research Group.
Among the significant transactions in 2024 were two distinct equity investments in Vantage Data Centers, amounting to $9.2 billion in total. Additionally, Vantage Data Centers secured a $3.1 billion equity investment for its operations in the EMEA region. Alongside Vantage, EdgeConneX and DataBank both also received substantial equity investments.
Comparing these numbers to previous years, the peak prior to 2024 was in 2022 when deals valued at $52 billion were completed. However, 2023 witnessed a dip in M&A activity, with deals amounting to $26 billion. Synergy Research Group’s report attributes the surge in 2022 to two major deals, each exceeding $11 billion. These deals involved the acquisitions of CyrusOne and Switch, occurring in March and December of 2022, respectively.
Excluding deals surpassing $2 billion, the trend shows 2021 as the peak year, followed by a 32% decrease in 2022, a 7% decline in 2023, and a substantial 131% increase in 2024. Notably, the report highlights the influx of private equity firms into the data center sector. Since 2021, private equity investments have accounted for a significant portion, ranging between 80 to 90%, of the total value of closed deals.
M&A activities encompass a range of transactions, including company acquisitions, joint venture investments, minority equity stakes, singular data center acquisitions, share sales, and land acquisitions for data center development.
Overall, the report underlines the robust growth of M&A in the data center industry, with private equity playing a pivotal role in driving this upward trend. As the sector continues to evolve, the influx of capital from private equity firms is expected to have a lasting impact on the landscape of data center investments and acquisitions.
