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CyrusOne is buying New York based data center provider Cervalis for $400 million, allowing CyrusOne to expand into the North East of the US, and increasing its portfolio to 31 data centers in the US, UK and Singapore.

The deal gives CyrusOne four sites described as “Tier III+”, in New York, New Jersey and Connecticut, all designed to serve high-end enterprise customers, and financial institutions. The New York operator has some 500,000 sq ft (about 50,000 sq m) of space which includes 125,000 sq ft (about 12,000 sq m) of colocation space. Cervalis also offers disaster recovery services, with some 100,000 sq ft (about 10,000 sq m) of “work area recovery space” - office space ready for clients to use in the event of a disaster.

Serving financial firms 

“We are really excited about this transaction and expect it to create significant strategic opportunities for our customers and benefits to our stockholders. I have known Mike Boccardi and Larry DeGeorge at Cervalis for many years and have always admired the team they have assembled and the financial services focused platform they have created in the New York Metro area,” said Gary Wojtaszek, president and chief executive officer of CyrusOne. “Their focus on serving the needs of the largest financial enterprise customers in the world will be a valuable complement to CyrusOne, and we look forward to working together to continue to grow the combined business and create value for our shareholders.”

For its part, Cervalis is equally delighted: “We have known CyrusOne and the management team for many years and are glad that we will be able to join the companies together,” said Michael Boccardi, president and chief executive officer of Cervalis.

Cervalis made revenues of nearly $70 million in 2014, about two-thirds coming from colocation, with the rest from interconnection, managed services, and disaster recovery services. Around 77 percent of its colocation space is in use, and it has buildings that could expand it by 55,000 sq ft (about 5,000 sq m).

The all-cash deal is expected to close within the next two months.