Data centre acquisitions predicted to grow as private equity interest peaks

Leading data centre executives and their advisers are meeting in London on March 19 for the TMT M&A Forum (, with deal activity tipped to increase in Europe over the next 12 months. 

Nicola Hayes, Founder of Andrasta Consulting, who will be speaking on the ‘Investing in Data Centres’ Round Table, one of 14 key sessions at the conference, said private equity firms expect aggressive expansion from their target companies and 2014 will see a surge in M&A activity in the industry.

“Acquisitions will be driven by large non-European colocation companies who are actively seeking footprint across Europe and are likely to view acquisitions as preferable to build, particularly in tier I cities,” said Hayes. 

“In addition, many colocation companies lack the necessary skills and expertise to move further up the value stack into cloud based offerings. This is fuelling the acquisition of smaller specialist cloud based service companies. High growth rates and healthy EBITDA margins continue to make data centres attractive for investors. With private equity backing, smaller companies offering colocation can rapidly expand through acquisition and the indicators are that we will see more of this during 2014,” she said. 

Sam Kemp, Corporate Director, Barclays’ TMT team, who is also speaking on the roundtable session, said he expected investment to continue in the sector due to the unrelenting proliferation of data which is helping to drive demand.

“The main challenge for the data centre industry this year is the sophistication of the buyers,” said Kemp. “Companies are becoming more cautious about over-committing themselves, spending longer on contractual negotiations and internal deliberation before signing contracts. Buyers are also now purchasing capacity on shorter terms, with increased flexibility and capacity to grow their requirements with their selected provider. Providers therefore need to look into creating a business model that fits the buyers’ growing demand in what is a maturing market.”

The 3rd annual TMT M&A Forum takes place at The Andaz Hotel in London on 19 March. Over 150 executives will attend, including telecom, media, technology and data centre executives, financiers, government regulators, investors and professional advisers.  

Also joining the Investing in Data Centres’ session are: Nick Razey, CEO, Next Generation Data; Peter van Rooyen, CIO, Dasym Investment Strategies; and Daryl Seaton, CFO, Virtus Data Centres.

The conference also features sessions on Telecom Strategy; TMT M&A; The Future of TMT; Financing, Regulation and Spectrum, Mobile Infrastructure; Media and Content; M2M; Emerging Markets Risk and CFO Strategies. 

For further programme and speaker details go to: 

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