2024 has been another milestone year for the data center industry. Records were broken for mergers and acquisitions at the top end of the market, and numerous smaller deals indicated interesting trends within the wider industry.
Synergy Research Group noted that, after a “relative lull in 2023,” data center-oriented M&A was again reaching the highs of 2021 and 2022.
John Dinsdale, chief analyst and research director at Synergy Research Group, told DCD in December: “Since the end of August, the total value of deals officially closed this year has now risen to $50 billion, with a good number of deals in the pipeline which may well close before the end of the month/year. Almost certainly, 2024 will become the new record holder for value of closed data center-oriented M&A activity.”
AirTrunk sets new records
A new record for the largest-ever data center deal was created in September when Blackstone and the Canada Pension Plan Investment Board (CPP) acquired APAC-focused data center firm AirTrunk from Macquarie Asset Management and the Public Sector Pension Investment Board.
The deal has an implied enterprise value of over AU$24 billion (US$16.11bn), beating the previous record holder - KKR and GIP's $15 billion acquisition of CyrusOne in 2021.
AirTrunk was founded in 2016 with plans to develop hyperscale data centers in Australia. The company opened its first facility in Sydney in 2017, and has since expanded across the region, operating and developing campuses in Australia, Hong Kong, Japan, Malaysia, and Singapore.
Blackstone previously acquired US operator QTS for $11 billion in 2021 and has been rapidly expanding the company’s footprint across the US and Europe. It launched Asia-focused data center firm Lumina CloudInfra in 2022 and has invested in Chinese operator Vnet. It also has joint ventures with COPT, Digital Realty, and others.
CPP has previously invested in a number of data center funds and joint ventures, including several in Asia.
Blackstone said its data center portfolio now totals $70 billion, and has another $100 billion in its pipeline.
Amazon goes nuclear
Not the largest deal of 2024, but possibly one that was a bellwether for industry change, Amazon acquired a nuclear-powered data center last year.
March saw the company acquire Talen Energy’s 960MW Cumulus data center campus next to the Susquehanna nuclear power station in Pennsylvania for $650 million. Amazon has since filed to develop a 15-building campus totaling around 1GW at the 1,600-acre site – though the company’s energy arrangement with Talen has met resistance from other utilities in the area.
Amid an AI boom and ongoing capacity shortages, nuclear power is seen as a potential answer to growing power needs that won’t ruin sustainability targets.
Amazon, Microsoft, Google, and others have all announced various deals involving existing nuclear power plants or SMR providers in recent months.
HMC forms Australian powerhouse
While AirTrunk was the biggest deal to come out of Australia in 2024, there was plenty of other activity, much of it driven by investment firm HMC Capital.
After acquiring North American digital infrastructure investor StratCap in February, HMC purchased Global Switch’s Australian unit, comprising two conjoined data centers in Sydney, for AU$2.12 billion (US$1.41bn).
HMC also acquired iseek and its seven Australian data centers for AU$400 million ($264m) from Amber Infrastructure.
Formerly known as Strategic Capital, StratCap has data centers in Colorado, Florida, Wisconsin, Ohio, and Georgia in the US as well as at least one facility in Ontario, Canada. It has regularly acquired small numbers of cell towers across the US.
HMC has since launched DigiCo Real Estate Investment Trust (REIT), a new company to hold its data center assets.
The REIT manages 13 data centers serving 586 customers, and said it had agreed deals for the acquisition of three North American enterprise and hyperscale data centers for AU$2.29 billion ($1.5bn).
However, DigiCo REIT had a disappointing IPO in December. The company raised AU$2 billion ($1.3bn) in its initial public offering (IPO) at a share price of AU$5 ($3.25), but saw its price fall to AU$4.55 ($2.82) on its first day of trading.
The Global Switch deal brought down the curtain (in one market at least) on a long-running saga. After taking full control of the company back in 2016, Chinese steel giant Jiangsu Shagang Group has been looking to sell Global Switch since 2021. More than a dozen companies have been named as potential buyers, but a deal was never closed.
Further deals involving the company’s remaining assets in Europe and Asia could be on the cards in 2025. December also saw Global Switch officially confirm it was seeking a co-investor for its London campus in the UK.
Colovore changes hands, looks to expand liquid-cooled footprint
Interest in liquid-cooled data centers rocketed in 2024. The latest and greatest GPUs from Nvidia are reaching a point where liquid cooling is a necessity rather than a nice to have, and all the major cloud providers are now deploying new designs as a result.
One of the early frontrunners in liquid cooling, California-based Colovore, is under new ownership, with investment firm King Street taking a majority stake in the company in May.
Launched in 2013, Colovore carved out an early niche for liquid-cooled racks capable of up to 35kW. The company launched its original single-story, 24,000 sq ft (2,230 sqm) facility at 1101 Space Park Drive in Santa Clara back in 2014, well before the current AI wave that is driving up interest in liquid cooling.
Focused on retail colo rather than hyperscale, Cerebras, Lambda Cloud, and Cirrascale are among known customers of Colovore.
Digital Realty Trust and Silicon Valley real estate development firm Pelio & Associates were previous investors in Colovore, alongside a number of private backers.
In an earnings call, Digital Realty confirmed it had liquidated its 17 percent interest in Colovore. The move generated gross proceeds of approximately $35m; a gain of approximately $27m on its original investments, made in 2015 and 2017. If a 17 percent sale generated $35m, that suggests Colovore was sold for around $205 million.
Despite its status as an early adopter, Colovore had been slow to expand its footprint. The company announced plans to build a second, 9MW facility known as SJC02, on a neighboring plot in November 2022. The facility was set to launch in December 2024 - though at time of writing there has been no official launch announcement.
Post-acquisition, the company has announced plans for data centers in Chicago, Illinois, and Reno, Nevada, and quietly filed to develop a site in Austin, Texas.
King Street is a global alternative investment firm founded in 1995 that manages more than $25bn in assets across public and private markets.
Europe heats up
Europe, a well-established market with limited capacity, has seen plenty of activity this year.
Alternative investment firm H.I.G. Capital acquired a majority stake in new Nordic data center firm Polar, with the deal said to be worth “up to $500m.”
Founded earlier this year by Lian Group, Polar has two facilities in development in Norway. The company is led by former Vantage CTO Andy Hayes.
US investment firm Bain Capital acquired an 80 percent stake in European operator AQ Compute. Aquila Group founded AQ Compute in 2020, with its first data center opening in Oslo, Norway, in February 2024. It also has projects in Spain and Italy under development.
Infranity, which is an investor in Vantage, acquired Global Data Centre Group’s stake in Etix Everywhere for around $117m. Eurazeo remains an investor in Etix. After Vantage acquired most of Etix’s European hyperscale footprint, ASX-listed Global Data Centre Group bought the remainder of Etix in 2020. Today, the company operates small Edge facilities in France, Belgium, Thailand, and Colombia.
November saw CVC DIF, the infrastructure arm of global private markets manager CVC, acquire Spanish data center firm Adam Ecotech, which owns three operating data centers across Barcelona (x2) and Madrid, totaling 6,900 sqm (74,270 sq ft) and 7MW of capacity. It is also in the process of developing a greenfield data center in Barcelona and expanding its existing infrastructure to reach up to 12MW of capacity in the coming years. CVC also owns US operator Tonaquint.
Belgian telco Proximus sold its data centers to local operator Datacenter United (DC United) in a sale-leaseback deal. DC United took over four facilities in a deal valued at €128 million ($138.5m). As part of the deal, DC United owner TINC sold a 50 percent stake in the newly combined data center firm to Cordiant Digital Infrastructure Limited. Cordiant also owns Czech telecoms firm České Radiokomunikace (CRA) US data center firm Hudson Interxchange, Ireland's Speed Fibre, and Belgian tower firm Norkring Belgie.
Keppel-linked European asset management company Aermont acquired Spanish data center operator Nabiax from European-focused infrastructure investment firm Asterion Industrial Partners and telco Telefónica. Nabiax's portfolio totals three data centers with an installed IT power of 35MW located at facilities around Madrid and Barcelona. The sites can reportedly expand to more than 100MW.
Investment firm InfraVia is to acquire a 50 percent stake in French telco Iliad’s data center unit, OpCore. The deal values the Scaleway spinout at €860m ($903.4m) and will see the company expand from 131MW to hundreds of megawatts.
"While activity remained concentrated in key markets, 2024 saw the continued emergence of a changing industry landscape, with several “secondary” locations like the Nordics and cities including Madrid and Berlin, capturing providers’ attention," says Max Gilbert, managing director at investment bank Houlihan Lokey's technology group. "Data center activity in Europe will remain top of the agenda for infrastructure investors in 2025, with significant growth potential driven by ongoing exponential increases in data consumption and potential material upside from artificial intelligence, supported by a wide range of customers. We expect activity in Europe to remain highly active through 2025.
DigitalBridge buys Yondr
Digital infrastructure investment firm DigitalBridge had another busy year. Its Vantage and DataBank units raised billions of dollars from new investors; Switch is reportedly set to go public again; Scala could be potentially up for sale; and it acquired Japanese tower firm JTower, just to name a few.
Most notable of all, however, was the acquisition of data center developer Yondr. DigitalBridge acquired Yondr in October, in a deal set to close in the new year.
Yondr will continue to operate as an independent company within DigitalBridge’s portfolio. How this will work long-term remains to be seen, given that Yondr operates in many of the same markets as Vantage, competing for the same customers.
Yondr currently has a contracted capacity of 878MW, with more than 58MW currently operational. The company has projects in Virginia, UK, Malaysia, Japan, Germany, and India.
It has more than 420MW of capacity committed to hyperscalers, with “significant” additional land to support a total potential capacity of over 1GW, according to DigitalBridge.
Yondr was previously owned by single-family investment office Cathexis, with investments from Apollo Global Management, and Mubadala.
While it may be unrelated, the sale came shortly after the collapse of ISG, a major UK construction firm also owned by Cathexis.
Investment firms go big on investment firms
While investment firms were busy buying data center firms to form new platforms across 2024, they were also busy buying other investment firms.
October saw asset manager Blue Owl Capital acquire Stack owner IPI for $1 billion. Like HMC, Blue Owl was never previously known for its data center investments, but has been active in 2024. The company formed a $5 billion joint venture with Chirisa and PowerHouse to develop data centers across the US – mostly for AI cloud firm CoreWeave – and a $3.4bn joint venture with Crusoe to build an AI data center campus in Texas.
In January, equity firm General Atlantic announced plans to acquire Actis. With some $12.5bn assets under management, Actis is a major investor in Chinese hyperscale data center operator Chayora, has a majority stake in Nigerian operator Rack Centre, and acquired 11 data centers in Latin America and the US from Nabiax.
The same month saw Blackrock acquire Global Infrastructure Partners (GIP), the world’s largest independent infrastructure manager, for $3 billion. Founded in 2006, GIP owned major stakes in CyrusOne and Vantage Towers.
October also saw Ares Management acquire GLP Capital Partners' international business, which included its data center unit Ada Infrastructure, for an estimated $3.7bn. Ada has upwards of 1GW of capacity in development across markets including London, Tokyo, Osaka, and São Paulo.
APAC real estate giant ESR – which has a growing data center business – is set to be acquired and taken private by a consortium comprised of Starwood Capital Group, Sixth Street, SSW Partners, the Qatar Investment Authority, Warburg Pincus, and ESR’s founders. Announced in December, the deal would value the company at $7.1bn.
The company has made a number of investments in the data center space since 2021; it has 575MW of committed data center sites in key markets across APAC, with a pipeline of more than 2GW worth of land and projects.
https://www.datacenterdynamics.com/en/analysis/data-center-ma-2024-a-record-breaking-year/
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