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Data Center Blockbuster: Digital Realty’s InterXion Acquisition Nearly Complete

One of the largest data center colocation acquisitions in history could close as early as March 9 with the merger of Digital Realty and InterXion.

Digital Realty is nearing the closure of one of the biggest data center acquisitions in history with its $8.4 billion merger with Netherlands-based InterXion, which will likely close in March.

On Friday, Digital Realty shareholders approved all proposals related to the stock-swap purchase of InterXion, which has 53 facilities in 11 European countries and 13 metros areas including Amsterdam, Paris and Frankfurt. Earlier this week, InterXion shareholders also approved the merger.

The two colocation specialists, which also cleared all regulatory approvals this week, expect to close the deal as early as March 9.

[Related: CyrusOne’s Gary Wojtaszek Departs As Data Center Company Hits $1B]

“We look forward to completing the exchange offer and closing the transaction in short order,” said Digital Realty CEO William Stein in a statement. “Together with InterXion, we will be even better positioned to enable customers to solve for the full spectrum of data center requirements across a global platform, and we are confident the combination of our two organizations will significantly enhance our ability to create long-term value for the customers, shareholders and employees of both companies.”

The merger of San Francisco-based Digital Realty and InterXion will create a leading pan-European data center provider, offering services to approximately 70 percent of the GDP in Europe. Digital Realty currently operates approximately 210 data centers in 14 countries.

A key goal with the merger of Digital Realty and InterXion is to enhance both companies’ capabilities to address the public and hybrid cloud requirements of their significant global customer bases.

InterXion is undergoing rapid data center expansion. The data center provider has several data center development projects under construction with over $400 million invested and a total expected investment of $1 billion.

Stein is expected to serve as CEO of the combined company. InterXion CEO David Ruberg will serve as chief executive of the company’s Europe, Middle East and Africa business, which will be branded InterXion, a Digital Realty company. Ruberg will transition out of his role within one year after the deal is completed.

Digital Realty recently reported fourth fiscal quarter 2019 revenue of $787 million, up 1 percent year over year, with net income of nearly $350 million. Earlier this year, the company sold 10 of its Powered Base Building data centers for $557 million, in part to help fund the blockbuster acquisition of InterXion.

In 2019, approximately 105 data center acquisitions were closed, up 6 percent compared with 2018.

Over the past five years, the largest deals to be closed were Digital Realty’s acquisition of DuPont Fabros, followed by Equinix’s acquisition of Verizon’s data centers and then Equinix’s acquisition of Telecity. From 2015 to 2019, the two largest investors that stand out from the pack were Digital Realty and Equinix, the world’s two leading colocation providers. In aggregate, they accounted for 31 percent of total deal value over the period.

 

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