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QTS acquired in $10bn datacentre deal

Investment firm, Blackstone, is hedging its bets on the growth in data processing capacity that will be brought about by digitisation

Datacentre operator QTS Realty Trust has been sold to investment firm Blackstone, in a deal valued at approximately $10bn. Blackstone said it will provide resources and consistent access to capital to support QTS’ growth and help expand the reach of its datacentre services, supporting new and existing customers.

Greg Blank, senior managing director, Blackstone Infrastructure Partners, said: “We are delighted to back QTS and its world-class management team as they continue to scale the company to meet the rising demand for datacentres.

“QTS aligns with one of Blackstone’s highest conviction themes – data proliferation – and the required investment makes it well suited as a long-term holding for our perpetual capital vehicles.”

The company said it sees growth opportunities in the “rapid digitisation of data”, which requires greater levels of datacentre-based computing.

Upon completion of the transaction, the parties expect that QTS will continue to be led by its senior management team and maintain its corporate headquarters in Overland Park, Kansas.

Chad Williams, chairman and CEO of QTS, said: “We see a significant market opportunity for growth as hyperscale customers and enterprises continue to leverage our world-class infrastructure to support their digital transformation initiatives.

“We are confident this transaction is the right step to achieve our strategic objectives in our next phase of growth. I want to thank each of our QTS employees for their continued dedication to a culture of service to others, which has positioned QTS to enter into this transformative transaction.”

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The deal is seen as the biggest acquisition of its kind in the datacentre market. According to Synergy Research Group, prior to this announcement, the biggest datacentre mergers and acquisition deals were Digital Realty’s $8.4 billion acquisition of Interxion, Digital Realty’s $7.6bn acquisition of DuPont Fabros, and the acquisition of Global Switch by the Jiangsu Shagang Group of China, which was eventually valued at over $8bn in transactions that were spread over three years.

“Given the explosion in the amount of data that is being generated and has to be processed, along with the ongoing boom in both enterprise and cloud markets, it is little surprise that datacentres have been such a hot ticket in the M&A arena,” said John Dinsdale, a chief analyst at Synergy Research Group.

“The datacentre and colocation market has been constantly evolving over the years and this will continue. The almost inexhaustible demand for datacentre capacity has led to a drive to find new sources of capital funding and there continues to be a long list of willing investors.”

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