US telecom and data center provider Cincinnati Bell has completed its acquisition of Texas colocation provider CyrusOne from the private equity investment firm Abry Partners for about $525m. The deal expands Cincinnati Bell’s data center portfolio to 17 facilities, adding a total of 174,000 sq ft of space in Houston, Dallas and Austin to the buyer’s portfolio. The company’s total data center space inventory is now about 620,000 sq ft.

Based on both companies’ annualized first-quarter 2010 results, the 17 facilities have the potential to bring an operating income of $56m.

"With more than 600,000 sq ft of high-quality data center space and almost $100m of adjusted EBITDA, we believe the combined data center business of Cincinnati Bell and CyrusOne makes us one of the largest data center companies in the US and strongly positions us to help large enterprise customers manage their global data center requirements with highly cost-efficient and flexible solutions," Cincinnati Bell President and CEO Jack Cassidy said in a statement.


CyrusOne CEO Dave Ferdman said the acquisition will give CyrusOne the means to expand outside of Texas, something the company’s customers have been requesting "for years," but were met with reluctance "as we didn’t have the size and scale that we now have with Cincinnati Bell."

Cincinnati Bell first announced the agreement with Abry in May. The buyer is using $210m of secured revolving credit facility and $760m of secured-term-loan credit facility.

Along with new data center capacity, the deal gives Cincinnati Bell new large customers. CyrusOne’s focus is on the energy sector and its customers include the likes of Halliburton, a large oil-field service provider to energy companies that was at one time run by the former US Vice President Dick Cheney, and Dynegy, one of the largest energy wholesalers in the US.

Part of CyrusOne’s business model has been to differentiate itself by providing a "pure colocation" service in a market where most players are striving to provide as wide a portfolio as possible of hosting, managed services and cloud-based services in addition to colocation.