Digital Realty Trust has completed the previously announced acquisition of Telx, the colocation and cloud provider, from private equity firms ABRY Partners and Berkshire Partners. The transaction is valued at $1.886bn.
The acquisition doubles Digital Realty’s footprint in the colocation business, and gives it an interconnection platform, albeit one it already works with in many of its data centers through previous agreements.
The deal follows earlier evidence of consolidation, as Equinix seized European colo player Telecity for around $3.6 bn in cash and stock this year, QTS Realty Trust bought Carpathia Hosting in May and CyrusOne spent $400m on acquiring Cervalis in April, and it looks as if there could be more acquisitions on the way.
Telx was owned by two private equity companies, Berkshire Partners and ABRY Partners, which bought their stakes in 2011 and have achieved a healthy profit in this sale to Digital Realty.
Telx will now operate as Digital Realty’s colocation and connectivity line of business.
The $1.8bn price is more that the total 2014 revenue for Digital Realty which only had had $49m cash reserves at the end of Q1 this year.
“With the settlement of the forward equity agreements, we have now completed the entire financing for the Telx transaction,” commented Andrew P. Power, Digital Realty’s chief financial officer.