Digital Reality, Global datacentre and colocation solutions provider, is set to acquire TelX, USA-based datacentre and interconnection company for $1.9 billion from private equity firms ABRY Partners and Berkshire Partners.
The acquisition is expected to double Digital Realty’s position in the fast-growing colocation business and offer Digital Realty customers access to a leading interconnection platform. TelX’s extensive interconnection framework allows the exchange of information between communication providers, enterprises, content providers and other entities with low latency and diverse connectivity across the world and this would pave way to offer Digital Realty an opportunity for future growth. At the end of first quarter this year, Telx managed 1.3 million square feet of data center space operating out of 20 facilities in the country among which two belongs to TelX, eleven are leased by Digital Realty and other are subleased either by Digital Realty or by third-party.
William Stein, Digital Reality’s CEO said, “This transformative transaction is consistent with our strategy of sourcing strategic and complementary assets to strengthen and diversify Realty’s data centre portfolio and expand our product mix and presence in the attractive colocation and interconnection space.” He also added, “Telx’s well established colocation and interconnection businesses provide access to two rapidly growing segments with long-standing customer relationships in top-tier metropolitan areas such as New York and Silicon Valley. This transaction advances our objective of ensuring that Digital Realty’s suite of products and services is able to best serve our customers’ current and future data centre needs.”
Chris Downie, CEO of TelX said, “We are excited to join Digital Realty and become part of a much larger global data centre services platform. We look forward to working with the Digital Realty team to extend a broader, enhanced data centre solution to our collective customers. As we open this new chapter, I’m proud of our team who, with support of our partners, ABRY and Berkshire, have significantly increased Telx’s revenue and earnings since 2011 a have positioned the company for long-term growth.”
To process the acquisition, Digital Realty had discussed with the lenders and received $1.9 billion in an unsecured terms loan bridge facility. The deal is expected to close later in the year and is subject to customary closing conditions. The transaction is expected to be accretive to 2016 financial metrics.