New data from Synergy Research Group shows that after a relative lull in 2023, the value of data center-oriented M&A deals that closed around the world in 2024 blew past the $50 billion milestone and finally reached $57 billion, easily surpassing previous yearly records.
2022 had been the peak in terms of the aggregate value of all deals formally closed, at $52 billion. In 2023 there was a drop off with total value falling by 50% to $26 billion. However, 2022 numbers were boosted by the two biggest deals ever seen in the industry, each valued at $11 billion or more.
If mega-deals of $2 billion or more are separated out, then the trend in the flow of what might be termed “regular deals” shows a different pattern. 2021 was the peak, 2022 dropped off by 32%, 2023 dropped again but only by 7%, and 2024 jumped by 131%.
In addition to the $57 billion of deals closed in 2024, there is another $29 billion agreed but not yet formally closed. Synergy is also aware of a pipeline of well over $15 billion in possible future deals, where companies are seeking new sources of funding or considering strategic options.
Since 2015 Synergy has logged a total of 1,498 data center-oriented M&A deals worldwide, with an aggregate value of $300 billion. Most of this comes from company acquisitions, but the numbers also include minority equity investments, investments in joint ventures, acquisitions of individual data centers, share sales and acquisition of land for data center development.
The four largest deals ever were each valued at $10 billion or more and closed in 2021 and 2022. These were the acquisitions of CyrusOne, Switch, CoreSite and QTS, who all feature in the worldwide top 15 ranking of colocation operators. The biggest deals closed in 2024 were two separate equity investments in Vantage Data Centers, which combined were valued at $9.2 billion. In two separate deals, Vantage also received $3.1 billion equity investment in its EMEA operations.
Other large 2024 deals were equity investments in EdgeConneX and DataBank. Apart from the rapid rise in overall data center M&A activity over the ten-year period, the most notable feature has been the extent to which private equity has flooded into the market. In 2020 private equity accounted for 54% of the value of closed deals, rising to 65% in 2021, and since then it has remained in the 80-90% range.
“There has been a tremendous increase in the demand for data center capacity, driven by cloud services, social networking and a range of both consumer and enterprise digital services. There is no end in sight to this trend, with generative AI technology and services adding a further boost to already strong demand,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “Specialist data center operators have either not been able or were not prepared to fund those investments themselves, while private equity investors have been more than willing to step in and fund growth initiatives. Looking at pending deals and the future pipeline, there is plenty of evidence to suggest that 2025 will be another boom year for data center M&A.”
