DataBank will acquire Zayo's zColo division for $1.4 billion. The deal includes the sale of 44 data centers in more than 20 markets across the United States and Europe. The transaction is expected to close in December 2020.
Once closed, DataBank will operate 1.1 million square feet of data center space, with 141 megawatts of installed UPS capacity. The deal boosts DataBank’s footprint from 9 markets to 29 markets.
Colony Capital acquired DataBank and Vantage through its 2019 purchase of Digital Bridge for $325 million. Digital Colony, another investment vehicle operated by Colony, partnered with private equity firm EQT Partners to acquire Zayo Group for $8.2 billion.
Included below are the respective DataBank and Zayo Press Releases.
DALLAS, Sept. 29, 2020 /PRNewswire/ -- DataBank, a leading provider of enterprise-class colocation, connectivity, and managed services, today announced that it has signed definitive agreements to acquire zColo, including certain U.S. and European data center assets, from Zayo Group Holdings. The zColo acquisition brings to DataBank an additional 44 data centers including 13 key interconnect locations across 23 markets in the U.S. and Europe. The transaction creates one of the largest privately held data center operators in the U.S. and positions DataBank as a leading provider of edge colocation and connectivity solutions to hyperscale, technology and content customers across the U.S.
In addition to growing DataBank's geographic footprint to a national scale in strategically important data center markets, zColo will contribute an exceptional base of diversified, blue-chip customers that complement DataBank's existing relationships. These organizations will benefit from DataBank's proven customer-focused service framework and operations which will expand to include the following:
64 data centers in 29 markets (up from 20 data centers and 9 markets)
Over 3,000 customers including many Fortune 100 and leading cloud and content providers
Pro forma annual revenue of over $450M
1.1M raised square feet of data center space
141 MW of installed UPS capacity
Over 30,000 network cross connects
18 major network interconnection points
12 cloud nodes
The transaction also significantly accelerates DataBank's edge and hybrid cloud strategies. The expanded data center footprint provides DataBank's customers with new geographic options for colocating their mission-critical content, data and workloads closer to end-user populations in key markets like Los Angeles, Denver, Chicago, Miami, Boston and New York City. With double the number of private cloud nodes and public-cloud on-ramps, DataBank customers will have more flexibility to design hybrid IT solutions that adapt as their infrastructure needs evolve.
"Simply put, this highly complementary acquisition will allow us to serve customers better. The strategic rationale is fully aligned with our core 'Data Center Evolved' strategy built around providing customers broad geographic reach as they move their content and applications closer to the edge," said Raul K. Martynek, CEO of DataBank. "We look forward to integrating zColo into our portfolio while elevating our existing level of service to meet the increasingly diverse workloads of our enterprise customers."
Having assembled one of the densest metro and long-haul fiber networks in the U.S., Zayo's data center assets also bring to DataBank a set of valuable network hubs and carrier hotel facilities, making it one of the largest providers of network-neutral interconnections and adding diversity and performance to the DataBank footprint.
Zayo Group will become a significant customer and continue to be an anchor tenant within the zColo facilities. DataBank customers will benefit from access to Zayo's global fiber network, enabling companies to get their data anywhere in the world. With a long-term agreement in place, the companies expect to collaborate closely in bringing colocation solutions to Zayo's fiber customers and private fiber network solutions to DataBank's colocation and cloud customers.
"This agreement allows both parties to focus on their core strengths," said Dan Caruso, Zayo Group's CEO. "We'll continue building the most fiber-rich digital infrastructure in the world while DataBank focuses on hosting the innovations and digital workloads that our fiber and network infrastructure were designed to fuel."
The transaction is being funded by an investor group led by Colony Capital, Inc. (NYSE: CLNY), DataBank's controlling shareholder, which includes Nuveen Real Estate and others. In addition to leading a consortium of world-class institutional investors to support the acquisition, Colony Capital is investing $145 million from its balance sheet to maintain its 20% stake in DataBank. Debt financing associated with the transaction has been underwritten by TD Securities, Truist Securities and Société Générale, acting as Joint Lead Arrangers and Joint Bookrunners for the new Credit Facility.
DH Capital served as financial advisor to DataBank in connection with the transaction and Jones Day served as legal counsel. JP Morgan acted as financial advisor to zColo and Skadden Arps served as legal advisor.
The closing of the deal is subject to customary conditions and regulatory approvals. The transaction is anticipated to close by year-end 2020.
BOULDER, Colo.--(BUSINESS WIRE)--Zayo Group Holdings, Inc. (“Zayo” or “the Company”), today announced that the Company has entered into an agreement to sell zColo, including certain U.S. and European data center assets, to DataBank. The transaction includes the sale of 44 data centers in more than 20 markets across the United States and Europe. DataBank will own and manage the sites, in which Zayo will remain a key anchor customer to provide network connectivity solutions for its customers.
“The applications that increasingly power our digital economy demand proximity to end users, scalable space and power, and network diversity and neutrality” “This agreement represents a material step in our path to focus on our core Networks business, which we first outlined in February 2019,” said Dan Caruso, CEO of Zayo. “With approximately 1,200 of the world’s most important data centers on our network, connectivity to major interconnection hubs and data centers will always remain a core part of our business. This transaction, however, will allow our colocation customers to benefit from the scale of a larger operator and allow Zayo to better align its resources around its fiber and connectivity business.”
This transaction merges the broad collection of zColo’s data centers and network interconnection assets with DataBank’s world-class data center footprint and Tier II market focus. The companies expect to collaborate closely in bringing colocation solutions to Zayo’s fiber customers and network connectivity solutions to DataBank’s colocation and cloud customers.
“The applications that increasingly power our digital economy demand proximity to end users, scalable space and power, and network diversity and neutrality,” said Raul Martynek, CEO of DataBank. “This transaction establishes the preeminent edge colocation platform in the U.S., allowing us to meet these demands across a wide geographic footprint and better serve our cloud, content and enterprise customers. We are excited to welcome zColo customers and employees to DataBank.”
The closing of the deal is subject to customary conditions and regulatory approvals. The transaction is anticipated to close by year-end 2020.
J.P. Morgan is serving as financial advisor to Zayo Group in connection with the transaction and Skadden Arps is serving as legal counsel. DH Capital is acting as the financial advisor to DataBank, and Jones Day is serving as legal advisor.
