Digital Realty to acquire Telx for $1.89 billion
Digital Realty is to acquire Telx Group in a deal valued at approximately $1.89 billion.
The acquisition is expected to double Digital Realty’s footprint in the co-location business, as well as provide its customers better access to Telx's interconnection platform.
Telx’s interconnection ecosystem is designed to enable the exchange of information between service providers, enterprises and content providers with low latency and diverse connectivity across a global network. The deal follows Equinix’s acquisition of UK-based Telecity for £2.35 billion in May 2015.
"This transformative transaction is consistent with our strategy of sourcing strategic and complementary assets to strengthen and diversify Digital Realty's data centre portfolio and expand our product mix and presence in the attractive co-location and interconnection space," said Arthur William Stein, Digital Realty's CEO.
"Telx's well-established co-location and interconnection businesses provide access to two rapidly-growing segments with long-standing customer relationships in top-tier metropolitan areas such as New York and Silicon Valley. The fact that more than half of Telx's 20 facilities are run out of Digital Realty properties further highlights the strategic fit as well as the potential incremental revenue opportunities we expect to be able to pursue as one company on a global basis.”
Chris Downie, Telx's CEO, said the combination of Telx's co-location and interconnection capabilities with Digital Realty's expansive wholesale platform provides greater flexibility and optionality for customers. The combined entity creates a provider which covers wholesale customer applications and smaller performance-oriented deployments in select high-growth urban submarkets across the US, he added.
At the end of March 2015, Telx – owned by ABRY Partners and Berkshire Partners – managed 1.3 million square feet of data centre space and operated 20 facilities across the country.
The transaction is expected to be completed later this year.